All Forum Posts by: Aaron J.

Just looking for opinions. I don't think I have the stomach for the rental business and risk in general but also understand that you cannot get ahead in life without taking some risks. As of right now, it seems as if we are at a standstill, with the exception of our home equity growth. I guess my question is what should we do next? We have no other debt other than our mortgage. Combined annual income is $75,000. Thoughts?

Age: 37, 34 Married 

Cash in bank: $60,000

Retirement Index Funds: $23,000

Mortgage Balance: $250,000

Fair Market Value: $570,000

Hi, just wanted to get some advice...

We made an offer on a house. The seller accepted offer with a counter of 2 weeks rent back. We accepted with a counter of all carpets and house professionally cleaned. The seller accepted. Today is the inspection. We learned some information about the seller through neighbors that the seller is a mentally ill alcoholic with no job and, broke and a recently broken family resulting in divorce. The seller has been arrested for alcohol/domestic related incidents. The seller will be living in the home from now until the close of escrow and two additional weeks of rent back. How risky is this and what is my recourse if damage is done (as a result of the sellers current mental instability) to the home between after the inspection takes place and the end of the 2 week rent back ? Also what if the seller doesnt clean the place as per contract. I realize I could go the legal route or through arbitration but wondered if it's worth it knowing that even if I won, i'd get nothing because the seller is broke. Thanks for your input. 

Hi Chris, 

Thanks for your response. My wife is in the same industry but I have made an industry change. But my wife is the one who makes more but she is currently on a temp status which may or may not go permanent. So you would recommend starting with a broker? Doesn't that mean more fees ? 

Thank you for your responses. Basically, the facts are:

1. We have over 30-40% DP

2. Our credit scores are around 800

3. Reserves will be around $10k

4. I started my full time job 1 week ago. My wife started her temp job 2 months ago.

5. We both have two years work history but not at our current employers since we just moved to a new area.

6. Proposed DI is 30% if you include my wife's income. 

Based on this information, what do you think a bank like Wells or BofA would say to us? I'm trying to save us the hassle of submitting docs and pulling credit, only to be declined. I want to make sure that we are well within lending guidelines and will be approved. Is this the kind of situation where you submit your app and hope for the best? Based on the fact that our credit is great, we have a strong down payment, and we will have reserves, shouldn't that offset the less than 12-24 months employment history?

Hi, my wife and I will soon be looking to get preapproved to buy a home. We just recently moved to a new state and don't have two years employment history here. I am looking for information on employment verification and what the government has to say about it vs. what the bank has to say about it. I'm wanting to know how to decipher between what is government regulation and what is bank policy? 

Currently, I am being told that because my wife is on a part time, temp status without two years history of being with her current employer that we will not be able to qualify for a loan and that this two year rule is a government rule, not a bank rule. I am employed full time but do not make enough to qualify on my own. Could someone point me in the right direction or give me a link to where these government rules are posted?    

Thanks Jon for that detailed answer. Much appreciated.

anyone? 

I'm an individual selling my condo. We have only lived here for 14 months. I've been told by my escrow company that California is going to take 3.33% of the sale of my condo as a withholding because we have not lived there for 2 years or more. (I find that so arbitrary btw.) 

I have reviewed Federal 2015 Publication 523 (https://www.irs.gov/pub/irs-pdf/p523.pdf) to see if I have a qualifying circumstance but I feel like I need a tax attorney to confirm if my circumstances apply or not. I feel my circumstances can be argued either way. I see that if I choose not to withhold and later found to be a mistake, then I am liable for 20% penalty plus interest, fees. ETC. So....  

My questions are...

1. Can the CA withholding be avoided some other way that is not listed in the publication? 

2. If the state of CA withholds 3.33%, how much will Federal withhold? Or is CA acting on behalf of the federal as well? 

Thanks for your input. 

Just wanted to get an opinion from BP regarding the rate I negotiated with my realtor to sell my Place.... 4.5% down from 6% Is this a deal? Or is this how most deals go down in the Bay Area? Thanks!

I need to be reminded again of the basics of the property acquisition investment concept and how it works. 

But let's say I buy the first investment and rent it out and cashflow between $100 to $300 a month. How is it that I will qualify for conventional financing for the NEXT investment if my debt to income ratio is at it's max? Will the bank view the rental income as qualifying income?

If they do then I can assume that will bring my debt to income ratio back to within the required lending guidelines again then allowing me to apply for more credit for the next investment?

How does the 20% down payment factor in to this on each investment property? How long is it going to take me to save up 20% on average in between investments? (Assuming the average purchase price is between $250k-$350k based on frugal living and a $40k a year job)

Also, if I am to rely on pulling equity out of the previous investment to get into the next investment, wouldn't that just push my payment up on investment I just pulled the equity out of thus cancelling out any profits?