All Forum Posts by: Luke Miller

@Joel Bowen,

The local market in Salem is different than where I buy in Florida. The weather here costs more in upkeep than my Florida homes. However, there is a demand for rentals. If you can find a good deal I think Salem is worth it (plus the landlord tenants laws have been more lax), but I have not seen the deals here for myself. 

This seems to be more of an equity play market (that is my opinion) based on land use laws, but I am not interested in the equity game. Shelling out 250k or more for a single family home is simply too steep for an equity play. Maybe I will change my tune in the future, but I have decided to keep buying in Florida and keep my primary here. 

Thanks @Jerry Padilla,

I forgot to get back to you and say thanks for the advice. I found out that because we already have 4 mortgages we are in the delayed financing scenario for #5. It took two months to find a decent lender who is licensed in Florida and now we are trying to push things through before we cross the 6 month threshold. 

My credit score is hovering right around the 720 mark (age of credit history is the negative factor) because of new accounts opened in the past 24 months. CCs are below 9% and we have nothing holding our score back besides the length of history. I think we will get a bump "up" in length of history within the last 30-45 days of delayed financing period. However, it is a close one, and has definitely been a learning experience. 

I just want this thing done so I can move on to the next property.

Thanks again.

@Rob Beland, thanks for your advice. I bank with Navy Federal Credit Union and USAA so, neither local to me, but I probably need someone local. I'll start making some calls based on your feedback and see where that takes me. NFCU keeps mortgages in house, but they are really strict. But, there is no harm in trying to see what they and others can do. Both banks/CUs have been great to work with, but it would be helpful to have that local connection as well.

Thanks a lot,

Luke

I closed on my 4th rental property today, cash. My other three rentals and my primary residence all have mortgages (no second mortgages, HELOC, etc.). I am interested in taking out a first mortgage, HELOC, refinance, etc. in order to pull the cash out for the next one. I know lenders can approve more than four mortgages, dependent on the bank/credit union overlays, but wondering who has had success landing 5+ mortgages and any recommendations as to who to use and what is the quickest, easiest, and most cost effective way to proceed?

My rentals are all in Florida and my primary is in Oregon. I have a solid credit score, two years tax returns including two of the properties, and one year tax return including all three properties (we have had one rental for 27 months, another for 20, and the other for 13 months). We have zero missed payments from tenants, no partial tenant payments, and have leases that take all three rentals past the first 24 months we owned them. 

Now, with a brand new rental that should be up for rent in a week or two, who should I approach about financing the free and clear home, and what is the best avenue of approval? 

Thanks,

Luke

About $200-$250/hour. Might be better by working out a flat fee. 

Jay,

My personal opinion is save your money. The FL bar association has  a solid stock lease. Attorney's are better used, at least in landlord and tenant law, when you need help with eviction. Florida is increasingly landlord friendly, and Escambia is pretty fast. Save the money for later...my humble opinion. 

@Jonathan F. I never received solid advice about the market, but purchased a place in July. I am seeing now who the market is catering to and how much they are willing to spend. It appears enough to cover a mortgage, but not a significant cash flow generator. In my neighborhood few homes are rentals. Most people here sell rather than hold. 

Good Afternoon,

I was looking for some opinion on the Salem, Oregon housing market. I am looking to relocate their this summer and have some questions.

1.) Is there a buy and hold market? I ask because it doesn't appear many rental properties are available. This is either really good from a landlord perspective or possibly that the market doesn't support long term rentals.

2.) If there is a buy and hold market, who is the demographic renting; i.e. college students, government employees, etc.?

3.) Overall market trend. When I crunch the numbers it makes sense to rent or buy. The properties aren't projected to bring me in significant cash flow when I would convert the property to a rental, but it might be an area that will appreciate over the next 10+ years. I am ok with breaking even on a buy and hold if the appreciation is there.

We are moving there for 3+ years so I can finish school and don't really want to be renters again. However, I follow the numbers and it's a toss-up without knowing the local market (I am in Florida with three single family houses).

Thanks for the insight and opinion.

Luke

Forgot to mention. A neighboring property to one of mine has been foreclosed on and up for sale (finally). I have two in that neighborhood, was outbid on another at auction a few months ago, and would buy this one tomorrow if we weren't moving. If interested I'll send you the address, etc. It's a 1998/1999 single family detached in good condition. Should sell for 47-52k (1-3k rehab) and rent is $775/month. If this is inappropriate for this section of the site my apologies.

Good Evening All,

Figured I'd give a quick update and say thanks for all the solid advice. We closed on rental number two a few months back and had tenants in prior to the end of the calendar year. As a result I was able to place both rental properties on our tax return and show a (+) for the year despite one house being occupied for the last 9 months and the other only 2 months.

Now we are about 2-4 months from moving out of the area because I am transferring law schools. We are turning our current primary into rental #3 and shopping for a new primary. I made some calls to the banks/CU's inquiring how we could make it work. Well, we are going to use a second VA loan for this home because we won't have the time to wait on a short sale, or foreclosure in need of repair. We'll likely spend a bit more than I normally would from an investment standpoint, but sometimes life doesn't allow all deals to be perfect.

As of yesterday a reputable VA lender informed me that they will cancel the two rental mortgages out (reducing our DTI) because of the completed tax return showing a (+). They will require 6 months reserves on the two current rentals, 3 months reserves on the converted principle to rental, and 3 months for the new principle. They will allow us to use 60% of our IRA as "verified and liquitable assets" for the reserve requirement without needing to liquidate anything.

I was astonished when the lender stated, "we will go as high as 60% DTI on VA loans." They will also allow a 12+ month rental lease w/ verified security deposit deposited as evidence that will also write off the converted primary to rental mortgage (they'll use 75% of rental amount taken from lease). 75% is more than enough to cover the mortgage so our DTI will drop to around 23%.

Anyhow, all is looking up. Once we land the new primary and relocate I plan to keep investing in Pensacola. Because of my "situation" and how grad school is funded/paid for, for me (weird situation, we are blessed), we hope to grab another 2+ homes this year.

Without getting into the legalities (which are not an issue) let's just say "hypothetically" by attending grad school I can fund our rental purchases at 5-6% without needing to do HELOC, high interest personal loans, etc. Could possibly allow us to be cash buyers as well.

Will update as all plays out......prepared for road bumps, but hope they are non-existant.

Lastly, anyone who has non-taxable income like me, the lenders have been saying, "We will gross up on conventional loans, but not VA loans." So using a conventional loan they add 20% to my income, while using a VA they add 0% to my income.

Cheers,