All Forum Posts by: Mike Neyman

B of A has a 620 score requirement. I'll give Quicken a call.

After a 10 week application process with Wells Fargo, they declined the loan because when they requested another bank statement, the applicant was a couple hundred short in his reserve requirement. Instead of letting him come up with the money, underwriter declined because she said it shows that he can't save money.

I'm working with a buyer for one of my properties who just got declined for a mortgage after a 10 week application process.

I'm trying to find another lender who will go down to a 600 credit score for an FHA loan.

The only one I know right now is Wells Fargo.

Does anyone know of any others?

As far as I know, the 90-day rule was rescinded a few months ago.

As far as crediting rent towards the purchase price, you can only credit a reasonable amount, not the whole thing. Talk to a mortgage broker about the exact guidelines.

Also keep in mind that just because FHA allows something does not mean that the lender will necessarily have the same policies. It is best to discuss specifics with the lender or mortgage broker directly because they all have different guidelines.

Also, selling prior to 90 days will almost always require a second appraisal.

Thanks for the input everyone. It sounds like I may be able to wholesale this one if I choose to go that route.

I think the point about having some SFRs in your rental portfolio may be lost on some people. Granted that you may have to settle for lower returns, but it is a lot easier to unload in case of emergency.

I don't know what the statistics are, but I would bet that 2-4 unit properties take a significantly longer time to sell than SFRs. Additionally, your potential buyers are limited to other investors who will not be paying retail prices.

Although we don't factor appreciation into our analysis anymore, it is worth noting that if/when the housing market does recover, I think SFRs will recover much faster because the value will be set by retail buyers and not investors.

Jon,
I've also seen 3% rents around here, but they tend to be in worse areas and usually only on multifamily properties with high maintenance and management costs. SFR give you an easier exit if you need to unload the property. I figured that may be an important factor for some investors.

I guess it wouldn't be a true wholesale because I would be making any repairs so that the buyer wouldn't have to worry about it.

In general, I agree with your point about $0 rehab being unlikely. I was trying to convey that it is rent-ready and any expenses would be typical maintenance items.

Thanks for the input.

I have a property under contract that I plan to hold as a rental, but have started thinking about wholesaling it to another investor. I've never done that before so I'm curious to see what investors would pay based on the following information.

Type: single family, 3 bed, 2 bath
Condition: Not newly rehabbed, but more than sufficient for renting
Additional Repairs Needed: $0
Location: Suburb of Cleveland, OH - blue collar area, not a war zone.
Market Rent: $900
Property Taxes: $193/mo

I know that any savvy investor would have to confirm all this information, but lets just assume its all accurate.

How much would you pay for this house?

Would you prefer that it be vacant or already have a tenant and property manager in place?

I'm thinking that one of the reasons we're encountering this is because more investors (both pros and newbies) are purchasing properties for long term holds. They can afford to pay more for the property and spend less on rehab. I do both rentals and flips and know that there is a big difference in what I would accept for a hold rather than a flip.

I think the important point here is that the buyers' own inspector found termite damage. They decided to go ahead with the purchase anyway.

Are they now claiming that they didn't know? If so, the report should prove otherwise. If buyers admit that they knew and want to be compensated after closing, I think they're out of luck.

You mentioned that you do not usually buy MLS listed properties. How do you usually find them?