All Forum Posts by: M Ness

I'm looking at my first investment property which is an REO. The listing agent told me there were already several offers.

Typically, are these offers priced above or priced below the asking price on the MLS? Should I be prepared to put in an offer in above that asking price?

Thanks.

Thanks for all the replies. Does the 50% rule typically include HoA/Common/condo fees? I know the 50% rule is the norm, but considering the maintenance covered by the condo fees (as Andrew mentioned), I couldn't see expenses being 50% in addition to the condo fees. For what it's worth, I will be managing it myself.

Thank you for the replies, everyone. I spoke to a few more brokers who were a little more optimistic. I'm going to try to get prequalified with a few of them and see how it pans out. I'm also going to keep my eye out for owner-financing deals; seems like that would be perfect if I could find it.

I'm looking for financing for my first investment property. However, I don't own a home. Banks and mortgage brokers have told me that I won't qualify for a rental mortgage/investment mortgage if I don't own a home.

Is there anything I can do?

Thanks for the help! We've got 25% ready for a down payment on a single family (condo unit). We've both got good credit, fortunately -- but because of my student loans, my DTI might be out of whack. I'm not sure if they look at student loans for that figure. If so, I will have her apply without me.

I'm looking for financing for my first deal. I'd like to get pre-qualified before I make any offers on properties.

The problem is that I have no real income history. I'm a student with a very lucrative job lined up after I graduate, but that's not for nearly a year. My wife recently graduated and just started working full time, but was previously working part time as a student. With a brand new job, and no previous full-time history, will banks lend to us as co-borrowers?

Thanks for the insight.

After a lot of researching, reading, and planning, I'm getting closer to purchasing my first property. The goal is to buy a cashflow rental condo unit. I settled on a condo unit for a few reasons: in my target town, an affluent college town, I cannot afford a house that would be a nice enough neighborhood to attract the type of tenant I want. Also, because this is my first property, having common area/exterior/roof maintenance is attractive.

I haven't made an offer on an exact unit yet, and my next step is actually to hopefully get pre-qualified for a mortgage for the property. But, before meeting with realtors and going down this path, I wanted to run the numbers past the experts here. I've narrowed down the neighborhoods/unit types I'm looking at, and this is a theoretical but likely scenario:

Property: 2 bedroom, 2 bathroom condo in multi-unit building.
Price: $75,000
Equity/Down payment: $20,000
LTV: 73.33%

Monthly Rent Income: $1,150

Yearly Gross Operating Income (accounting for vacancy loss): $13,000
Taxes and Insurance (yearly): $1,500
Yearly Condo Fees: $3,600
Misc Yearly Maintenance: $600

Yearly NOI: $7,300
Yearly Debt Service: $4,500

---

YEARLY BEFORE TAX CASH FLOW: $2,500
CAP RATE: 9.73%
ANNUALIZED CASH-ON-CASH RETURN: 12.5%

What do you think? If the numbers are right, is this a good deal? It seems good to me, but expert advice is always greatly appreciated!

Finally, this deal would require a $55,000 mortgage. Do you think a local bank or mortgage broker would be willing to lend? Is there a difference between an investment mortgage and a non-owner occupied mortgage, or are they the same thing?

Thank you all for the help. Much, much, appreciated.

Thanks for your reply. Is it possible to take out a conventional loan in our names but deed the property over to the LLC? Obviously it would be better to have the loan in the LLC's name as well, but if I can at least have the property deeded to the LLC I'd feel somewhat better. I do plan on following the corporate formalities to make sure the LLC actually protects my assets.

My partner and I are getting ready to purchase our first property. We will be forming an LLC with both of us as members for liability purposes as well as for structuring our business relationship. In keeping with maximizing the liability protection of the LLC and minimizing the risk of veil piercing, I'd like to mortgage to be in the name of the LLC. Obviously, though, the LLC will be new and will have no assets. My partner and I are both prepared to personally guarantee it on the loan application.

How should we go about this? Should we form the LLC first and then apply for a mortgage as the LLC with us as personal guarantors? Or should we apply just as co-borrowers and leave the LLC out of it for now? What is the norm?

Thank you for the help!

After a long time of reading, planning. and preparing, I want to start investing in real estate. I'd like to purchase a single condo unit in the $80,000 range with a $20,000 down payment, giving me somewhere in the vicinity of a 75% LTV ratio. The property would ideally cash flow with those parameters. I really want to get started now, while the market is first recovering, before I'm priced out of the market.

I would need a $60,000 mortgage. Here is the problem: I'm currently a student with very minimal and sporadic part-time income. I can potentially get a decent cosigner -- will that be enough? I'm terrified that because of my very low income, I won't qualify for any loan.

When I graduate in a year I will have an income that will definitely allow me to qualify (I have the confirmed job offer) but that's a year away and even then I know most banks want two years of income history.