All Forum Posts by: Patrick McCandless

Definitely going to try and make this if it works with my schedule!

@Grant Schroeder Thanks for the response! So you're saying I'm not technically able to rent out a property purchased with primary residence financing even for one single day during the entire first year of ownership?

PS - I used to use Marcus Watson as my go-to lender in the Phoenix area when I was doing sales out there. I don't think he's with Academy anymore, but thought you might know him. Great guy!

@Tim Swierczek Thanks Tim I will definitely revisit the second home qualifications if the primary route doesn't pan out which is my first choice.

@Tim Herman If you re-read my initial question I am asking how this can be done LEGALLY. I'm not asking how to do it fraudulently lol, but thank you for the word of caution. Obviously, purchasing as a primary residence and sticking a long-term renter in it right away is straight up fraud, but my question is geared specifically toward short term renting at an occupancy rate of less than I would actually be occupying it myself.

@Marc Rice Thanks for the recommendation and I did speak with the lender already. He said I just have to occupy it as my primary for at least 51% of the time for the first year and then it's fair game after that. There were no restrictions really when it came to purchasing as a second home whether I occupy it 1 day a year or 150 days a year. He knows it would be in the same town and he never mentioned that being an issue, but I will revisit that before it's too late definitely. Thank you!

@Matthew Williams Thanks for taking the time to get into some detail. The plan is definitely not to have a major life event lol. I guess my main question is what is considered "occupying" the property as a "primary residence"? Like what is the specific criteria? Is it just where you get your mail delivered at least 51% of the time? What if you have 3 homes? Is it where you get your mail at least 33.4% of the time? Does it not have anything to do with where you get your mail, but where you lay your head down to sleep the majority of the time? And yes I'm not so much worried about the loan being called due as I am about tax implications, but I do want to make sure I'm abiding by both of their rules so I can sleep at night. I know there have to be a lot of snowbirds that own a place in Arizona as well as say Minnesota and they have to make sure they are using one as a "primary" more than the other in order to save money on taxes or whatever the benefits might be of calling yourself a resident of one state over another. The only way I can think of that being actively monitored or reported is where you have mail delivered as reported by the USPS.

Hi all. I can't be the first to have this idea, but I can't honestly say I've heard anyone else doing something similar. I have what might be a great opportunity to purchase a home off market to make it a short term rental. The home is in the town where I own my current primary residence (which I am keeping, not selling). I am looking at my best financing options and the most obvious best option is purchasing as my new primary. 5% down conventional, great rate. The next best would be purchasing as my second home. 10% down, almost just as good of a rate. If I'm able to save the $27,000-ish by going with the 5% down that would be preferred so I have the funds to complete the cosmetic rehab needed as well as furnish the place and still have reserves. It will still cash flow great with 5% down so that's not a worry.

My question is what would be required of me for it to be legally considered my "primary residence" if I go that financing route? Just have all our mail sent there and say we reside there more often than our current primary residence (which would then be considered our second home, I guess)? And what kind of tax implications would that have if we are short term renting our "primary residence" versus short term renting a "second home". I obviously don't want to do anything that could raise a red flag with the lender or IRS or anything like that. I know if I get financing for a primary residence I'm technically saying that I will live in it for at least a year, but this gets a little grey when talking about making it a short term rental where it will likely be occupied 40-50% of the time and I can still have my mail sent there and technically reside in it the other 50-60% of the time.

Any help is appreciated!

@Bob Okenwa Yes I am! I like the sound of the 1.99% intro rate. I wonder if they will work with me being in CA? I did actually find a local bank who is at 3.75% as well now that I'm going back through my notes. I think the reason I went with PenFed initially was because they don't base the interest rate on credit score and if I need to bring my wife in to qualify for DTI purposes she didn't have a 740+ score at the time, but she's close now. Guess I know who I'm calling today!

@Bob Okenwa Who did you end up going with? Like I said, I have shopped around and I am having a hard time beating PenFed's rate even at the 90% LTV tier. So it's almost like I might as well stick with them and either take a chance at the paid appraisal coming back where I need it so I can take advantage of the <80% LTV rate of 3.75% or just do the 90% LTV rate of 4.75% and save the $600 or whatever on the appraisal since it's still lower than the competition.

@Justin Phillips Yes the order of events that they go by is 1) Automated desktop appraisal and if that doesn't come back with the number you expect then... 2) They hire an appraiser to do a drive by, snap a few photos, and pull 3 comps. Then if that still doesn't come back with the number expected... 3) Borrower pays for full appraisal. I'm now at #3 since the first two didn't pan out. The last I heard was that the drive-by appraisal can not be disputed, but they were looking into "what can be done at this point without having to go to a full appraisal".

Hey guys I was on my way with PenFed and the appraisal (the drive-by one they do after their desktop comes back lower than expected) came back way low. $45k under the appraisal from my refinance from just 1 month ago. The "appraiser" used completely irrelevant comps in a different neighborhood when there are literally 3 recent sales on my same street and 2 in my exact same floor plan. So now the only options are to pay for a $600 appraisal and hope that one comes back correctly or move forward at the value the first guy gave and go the route of a 90% LTV HELOC instead of an 80% LTV HELOC which is 4.75% versus the 3.75%. Problem is that I'm shopping around and everyone elses rates are like mid 4's to low 5's for an 80% LTV HELOC so even taking the 90% LTV option with PenFed I'm still on par with the competition it seems. Anyone have some recommendations on either disputing the current appraisal so I don't have to pay for one or other bank recommendations? Thanks everyone.

Not dead at all. I'm in escrow representing a client here on BP on a property I found for him while cold-calling a specific neighborhood he knew he wanted to target. It took me about two hours total of cold calling that neighborhood and I came out with a second lead as well. Just closed escrow on another one for good friends of mine in August from cold calling a specific neighborhood. Came out with about 4 other solid leads from that as well in about another 2 hours of cold calling. I'm reminding myself as I'm typing this that I need to get back at it!