All Forum Posts by: Peter K.

I don't like the idea of accepting tenants with lots of outstanding judgments.  My rationale is that if they already owe someone else money, I probably won't get paid if I end up evicting them and holding a judgment against them.  With that said, a judgment is not an automatic no go under my rental criteria.

Would be great to learn how others have incorporated judgments into their criteria.  Also useful to know is type of rentals you are managing.  Thanks in advance!

That makes sense Roy.  

An ARM may make sense for you--particularly since FHA requires you to live in the property while the loan is in place. If you plan to keep this property long term but only live in it short term, you should plan to refinance out of the FHA loan when you are eligible to do so.

Since the short sale was 2011, it may be worth waiting until later this year when you are past the four year waiting period.

I'm a loan officer and haven't done the full research on this issue--but here are my thoughts.

Fannie does allow 10 financed properties.  Some investors (servicing lenders) have an overlay that limits that to four.  Down payment will be 25% for investment properties with 2-4 units or 20% for single family with up to four financed properties.  With 5-10 financed properties the down payments go to 30% and 25%, respectively.  A decent size mortgage bank (I don't lend in California but my employer does have loan officers there) will have access to a Fannie Direct product with no overlays.  The interest rate may be a little higher than if you were subject to the servicing lender overlays, but you can still get a great rate on a conforming loan product.

Just because a loan doesn't show on your credit report does not mean the underwriter won't know the property is financed.  The underwriter will be reviewing Schedule E on your joint tax return to calculate rental income and see that there is claimed interest for each property.

What I'm not sure about is if a married individual can get under the cap by showing that some of the properties on Schedule E are titled and mortgaged solely in the name of their spouse.  You would need to work with a loan officer who understands investors and can present the scenario to their underwriter for an interpretation of the guidelines.

Why do you not have a choice but to go FHA? Conventional 5% down will have lower overall borrowing cost, and 3% down on conventional is an option too.

I'm a loan officer and most of the time for borrowers looking for the least amount of money to get in the door with the lowest monthly payment I propose a single premium mortgage insurance product, and I pay for it through a higher interest rate so there is no monthly PMI or lump sum due from the borrower at closing. I encourage you to ask your loan officer about this option, and if they don't have it or don't know how to structure the deal this way, look for another loan officer.

I've used Geis for replacing doors and springs. A door not opening would first be a handyman job though. I use Affordable Rentals and their "rent a worker" service for this kind of stuff when I don't have time to do it myself.

Hi Dejan and everyone else who has chimed in. I'm also in buying mode and focusing on northwest Milwaukee. I closed on a SFR at 44th and Hampton this morning, which is a bit further east than ideal but I already have a duplex in the neighborhood and this house was a good deal.

In the next year I plan to add a couple more SFR's and a four unit to my portfolio.

If your mortgage loan officer didn't go over what you can do to improve your credit, they are not doing a good job.  Sometimes just paying down the balances on credit cards by small amounts can get you the score increase you need.  Just need to wait 30 days after paying down the balance.  The trick is finding someone who understands credit scoring to advise you.  

I'm a loan officer and studied this stuff early in my career when I realized it can make the difference in whether or a deal gets to closing or can help lower borrowing costs for my clients.

I just had asbestos siding taken off of a small single family I own.  It cost about the same to have it removed as the new siding cost to go on, with materials from Menards not market up and and paying $25/hour to have it installed.  Not cheap, but mine was in bad shape.  I was told that we couldn't put siding over it as the nails would create dust--wish I would have seen this thread a month ago, I would have proposed the insulate first option.