All Forum Posts by: Matt Nico

@Melanie Langlois

Melanie,

Im in Polk county (disney world). When i do construction the inspectors want the smoke alarms hard wired, with battery backup. They dont allow battery only anymore (i dont think).

As far as security, id say buy in a good neighborhood where theft isnt a big issue, and have minimal security. A keyless entry, door bell camera, and a camera out back seem fine.

@Kevin Smith

Im sorry to say this, but you are thinking about the wrongs things right now. Your first house (and sometimes 3rd, 4th, and 5th) should just be in your own name. Id call a bunch of banks up, and try to get pre-approved for an FHA or conventional loan with what you have now. Buy it with the 3%-5% and start your journey.

No need to worry about LLC's, S-Corps, C-Corps, or anything. Just get through the first deal. That comes later when you have a track record for buying good deals that make you money.

Good luck!

Matt

@Audrey Thiault

Your friend could try to do a no document refinance for the property. Banks won’t check income, but the interest rate is much higher. Im trying to go down that route mysrlf.

It means "Non-Owner Occupied Matthew. A lot of lenders have no trouble giving a HELOC on a primary residence, but on an investment property its more difficult.

Took me a second to figure it out myself...haha.

@Kerry Baird.

This is an incredible list. Thank you so much for sharing. Ill be sure to pass along the favor you gave all BP’ers in the future to someone else!!!

Im having a pretty tough time finding a lender who will approve me for a HELOC right now. I have a lot of equity in 2 properties that id like to tap in to

I see that you are located in Melbourne FL. Do most/all of these lenders work in FL? I see a handful are state specific.

@Laverne Rivera ---  Hi Laverne, I own property in and around the Kissimmee area. Did you have a specific place in Kissimmee you were looking at? If you want to be able to rent it out in between you traveling to Florida, I could give you a few specific areas. Shoot me a private message :)

@Melanie Langlois  - I think the insurance is really up to you. 

Wind:   Make sure your inspector does a wind mitigation survey on the house. That gives you  gigantic discount on insurance in Florida. It usually costs an extra $100 when the inspector comes. 

Water:   For Flood Insurance, If the bank is saying you do not need to have it, then its really up to you. If you think you will be able to afford a big flood event after a storm hitting your property then no need to blow a couple thousand a year on insurance. A flood doesn't happen as often as you think. A lot of times flood zones are rated on the 10 year, 25 year, and 100 year storm event (I used to map stormwater runoff as an engineer)

Good Luck,

Matt

 

Hello Bigger Pockets!!! I was wondering if anyone has any good recommendations for acquiring a HELOC for a rental.

My Situation:

(3) Rental Properties. I cash flow $4,800/month (after mortgages and fees). Yes you read right. $4,800/month.

Salary of $63,000 (my wife) at her engineering job.

My problem: I tried Wells Fargo, and initially they said "Sure!!! A HELOC should be no problem with your income and assets." Fast forward 5 weeks and I am nowhere. They are giving me the runaround and denied my application, saying that my Debt to Income ratio is too great. Even though my 3 properties cash flow a ton, they are counting the mortgages against me, but not counting all of my income. They see the rentals as liabilities, not assets.

So with that being said......Questions:

1. Does anyone have any smaller local banks they could recommend to me that will see my rental property as assets instead of liabilities?

2. Does anyone know of a loan product that I can utilize to get a HELOC out of a rental property without verifying income? It seems foolish to even think about needing income to verify a loan backed by the house itself in the first place.

Thank you,

Matt

@Tyler Thomas,      Hey man, I actually ran into this exact problem that you are running into now. I would say to check on how much the fees are for owning an LLC in your state. I'm in Florida, and its like $150/year to have the LLC, so thats no real burden on me. If your plan is to get at least a couple properties in the near future it cant really hurt to get everything set up now. Get the LLC formed, then go to a bank and have them set up a couple business checking accounts for you (1 for deposits to hold), and then you can start to establish yourself.

From my opinion, I wish I had set up my LLC in the beginning. The reason is that before banks will give you a business loan or a business credit card or any of that, you have to have 2 years of established business and 2 years of tax returns. This is really screwing me as I never knew that. Its not a crazy big problem because you can still buy property under you or your wife's name, but it would have been nice to know that info up front. I'm fairly new to BP so If I were here earlier then maybe I would have figured it out.

Good Luck,

Matt

@Stetson Miller, yeah I guess my choice of words wasnt the best...haha. What I mean to say is that in the central Florida area like Tampa and Orlando (Where I invest), there does not seem to be a high inventory of Duplexes - Quadplexes. The ones that I have seen are extremely overpriced. Thats just my experience.

The right thing to do is to make your own multi-family. What I do currently is find larger SFH's that I can create a split plan. I'll get permitting for an ADU, and then turn a single family home into a duplex. I'm also exploring just building a quad plex outright. In my area in particular, there are a lot of land parcels becoming available as its gentrifying, so the opportunity is there.

-Matt