All Forum Posts by: Nnabuenyi Anigbogu

Welcome @Lucas Hammer. I currently live in Albany Park at the moment and i like the area. It is prime for multifamily properties. Be sure you are buying the condo at a great price. Right now condos are not too hot in AP due to the gentrification and higher number of renters. As more homeowners find this area it might get better. I have seen many condos around here sit on the market for 4-6 months and sometimes more. Also renting out a condo can be frought with issues if you have an unwilling HOA. I sold my condo in Irving park partly because the HOA implemented a rule a year after i moved in that limited rentals and therefore i could not rent it out. Also assessments and special assessments can eat into profits.

2-4 flats on the other hand are selling like hotcakes.

Let me know if you have any questions.

I dont think the point was being missed. If FHA is the only way you can buy a house then great go for it. I have used it for previous purchases and am using it now.

However people need to know what they are getting into and to realize that it is a great but more expensive way to buy a property. I did not want to leave false statements for new people to read and think it is the truth. FHA is good especially if you have little cash. But if you can, get out of it as soon as you can to get rid of PMI,

@Robert P. FHA is just about always more expensive that a similar conventional (i can't even think of a time when it isnt). What you are not factoring in is that all FHA loans have two types of mortgage insurance. The upfront mortgage insurance UPMIP and the annual mortgage insurance premium. The upfront MIP is 1.75% of the loan amount that is rolled into the loan and the annual MIP is .85% that is payed from escrow monthly.

A comparable conventional might have the annual MIP if you put down less than 20% but it will still be cheaper than FHA. You can go 3.5% down for FHA but it costs you thousands extra in the long run and more on a monthly basis.

There is no time limit on when you can get a HELOC or Loan. You can apply for it the day after you close on the sherrif sale house. However the bank will lend based off of your purchase price. I.E if you buy it for 100k and they lent at 80% LTV then max they will lend you is 80K. Even if it appraises for higher they will only lend based on the purchase price.

Key thing to watch out for in HML's are upfront fees. The only fee you should be paying upfront should be an appraisal fee (200-400 typically in my area) and maybe a credit check fee ($50?). Every other fee especially points are paid at the closing table.

Since you are in Georgia you should talk to @Darrell Shepherd who is a lender in that area. I have close a loan with him in the last 3 months.

@Gabe C.Since you have owned the home for over 8 years, i dont see how any bank would have an issue with you converting it to a rental. The due on sale clause typically only applies if the property changes ownership without satisfying the mortgage. Since you are retaining ownership and just renting out the house you should be good. 

The only change would be on your taxes and the fact that you have to learn how to be a landlord. 

Have fun

Is that the exact quote from the lender? I ask because that does not make sense. 

65% of "after built" i equate to 65% of the ARV (after repair Value). So if after you renovate the house is worth 100K, they will lend up to $65000.

However the second part (cash investment roughly equal to 35% (case by case basis) of total costs to acquire, renovate and stabilize.) is what is not clear to me. This usually refers to the project costs and not ARV. I.E if the house costs 40K to buy and 20K to fix you have to bring 35% of 40+20K (60K).

However the total they lend cannot be more than the $65000 (65%) of the ARV. so if you tried to buy the house for 60K with 30K renovation (and 100K ARV) they will lend up to 65K and you have to bring the rest yourself.

It is pre tax as far as i know. It is hard to deduce the post tax number due to the number of factors that can influence a persons tax situation.

The only issue with that is with your end buyer. You would have to get the property below the listed value by a good amount in order for you to be able to add your fee and still sell it to an end buyer.

Every good buyer on there is constantly keeping an eye on the MLS for there area. If the house is listed, chances are many investors have seen it and if it hasnt sold it means they passed on the deal. For a realtor to even be talking to you knowing you are a wholesaler, it means that they have not been able to sell it directly to an end buyer. In that case you must have excellent (and i mean excellent) negotiation skills in order to secure a contract way below listing price.

If you secure a contract at listing price (very doubtful) you would most likely not get a buyer because chances are that was already a bad deal for investors in the first place. You would have to add your fee to the listing price. As an end buyer i would not be happy if you sent me a deal that i find out is on the MLS for a cheaper price.

This is why its not the best idea to wholesale MLS properties.

@Kareem HymanYou would have to live there for a minimum of one year before you are allowed to fully rent it out.