All Forum Posts by: Mike Curadossi

Hello,

So I am in the process of refinancing an investment property with a 30yr fixed rate residential investment loan.  It has been about 5 months so I started the process so the property would be seasoned for 6 months at the time of the closing.  Here is my issue.  

At closing, the bank (property was a foreclosure) would not allow the property to have any filed mortgages on the property because it was a cash deal.  I have done about 5 of these and this was the first time that the seller (bank) had an issue with a first mortgage (hard money) and a second mortgage (line of credit) being on the closing hud.

My attorney told me that she would simply close the first without the mortgages filed and then immediately file another hud right after showing the two mortgages.  She assured me that I would have no problem doing a rate and term refinance in 6 months if the home was purchased this way.

Now the bank that I am using to close the new mortgage to pay back the original loans is telling me they can only go with a cash out refinance since the home technically wasn't purchased with a mortgage and it reads as I refinanced out of the cash on the second hud that was filed. This is a problem because all my numbers work at the 80% LTV that I can do with a rate and term refinance but don't work at a 75% LTV for a cash out refinance ( I will have to bring money to the table to close).

So is this correct?  There is no way to do a rate and term refinance on this property?  If I missed any details please let me know. 

Any insight would be much appreciated.  Thanks in advance!

Mike

Thanks everyone for the replies... leaning towards having them deposit into one account then transferring out until I come across something that is easier.

Robert,

I don't actually use quickbooks to invoice and collect payments.  I signed up for intuit payment network and did it all through that.  They are actually I think restructuring and changing the system from what I took from my phone conversations with them.  I would have my tenant sign up and make an account and set up a recurring payment so it pays on the first of every month.  I get email notifications on the first saying that it sent them an email requesting payment.  I get another email when I receive the payment.  Works great but the whole not having more than 3 bank accounts on it is a deal breaker now for me.   I guess if you run windows version of Quickbooks they have a payment option but I run a mac and i guess they don't have it yet or something? Who knows

Scott-  I was thinking of doing that but I don't always get paid on the first.  I want everything to be automatic so I wouldn't want to have payments coming out of my main account if the funds were not cleared yet for my rent payments. It is something I am open to doing but would like to avoid it.  Figured I would see what else is out there first

How do you handle cleaning each time there is a vacancy?  I am looking to buy a multifamily in a popular area for tourist and thinking about doing this instead of yearly leases but am just concerned on how much of my time will go to managing and making sure the place is always cleaned and well kept when people check in and out.  

Also how do you handle providing and returning keys?

So I came across a problem today...  

I have been using Intuit Payment Network (product of Quickbooks) to collect rent for 3 of my properties.  I went to add a 4th and 5th property today and I found out they no longer allow more than 3 bank accounts.  I set up a bank account for each of my properties so I can easily track and set up direct payments for my mortgage (one less thing to worry about paying)  Intuit has been working great for me (and only $0.50 a transaction) so I was pretty bummed when I found out.  I really want to avoid having all payments go into one account and then paying each account out from there afterward.  I reached out to Quickbooks as well and they said if I have a separate bank account for each property I would need to have a separate quickbooks account for each property as well.  Don't feel like paying for quickbooks each time I have another property.

I have also been using Cozy for rent payments.... which is decent.  I just hate how you have to wait 7-10 days for the check to clear and it is kind of a hassle for my tenants to initially set up.

Anyone know of any good rent payments that are either free or a minimal fee per transaction like Intuit was?

Thanks in advance for the input!

Mike

I have been using Cozy and it is great besides the fact that you have to wait about 1 week for the check to clear into your account.  Not ideal in all situations.  I have also been using Intuit Payment Network.  This is great because you can set up payments and you get them on the first with no waiting.  You do pay $0.50 a transaction tho but I would rather pay .50 than wait a week for the check to clear.  Only problem with Intuit is that you cannot set up more than 3 bank account numbers which has become a problem for me since I have each house in a separate bank account.  I am now looking for a new way to collect

@Tim Booz Great point.  Who else would know better than them right...

@Jean Bolger I am not sure what zoning is yet but will check with the town today to see. 

Hello all,

I will be looking at a single family property (4br- 2 ba) that I plan on rehabbing, renting and refinancing in a few hours and it has a large two car detached garage with a legal inlaw apartment above it.  

Question is... Can I rent the 4br house out and then rent the inlaw apartment out to someone else legally?  

I am sure there are some creative ways to structure the lease to make it work???  Looking to avoid possible issues when I go to refinance and get insurance.  Wouldn't want something to happen and leave myself open to get sued for illegally renting the inlaw apartment. 

Also need to know if I can use the projected rent in my numbers going into the deal to make sure it meets my criteria.

Thanks in advance for all of the help.

Mike

@Jerry Padilla

I plan on cashing out.  I obtained the hard money lending at 70% of the after repair value and then use my own money to rehab the properties.  The plan is to start the refinancing process at month 5 and then close on the new mortgage at month 6.  I currently have 2 mortgages and two properties to refinance with two more under contract.   I plan on finding a local portfolio lenders so I can avoid the limit on mortgages through banks that sell their loans off to Fanny ad Freddie. 

Would it be easier to put a second mortgage on the property for the rehab that I put into it and then do a rate and term (I think thats what its called) refinance instead of a cash out?  I have been using money from my parents home equity line to rehab the homes so I could have them file a second mortgage?

Thanks for your help!

Mike