All Forum Posts by: Preston Schmidt

Fannie Mae allows for up to 10 conventionally financed properties plus your primary residence for a total of 11 properties. You are allowed to now use 75% of the projected rental income without the need for landlord experience. Let me know if i can help further.

Welcome Dean! Let me know if I can help answer any financing related questions.

My first question would be, what is your current interest rate one your primary mortgage? If you refinanced and are able to get a lower rate even with a cash out refi, then by all means go that route. If your are on a time crunch as a full cash out refinance could take up to 45 days, then go the HELOC route as you could get a decision in as little as 2-3 weeks. I'm happy to help answer more questions.

Depending on the type of property (1 unit, duplex, triplex, quadplex) there are different conventional requirements. Freddie and Fannie require 25% equity (75% LTV) on single family (1 units) and 30% Equity (70% LTV) for 2-4 units on cash out refinances.

Only Owner occupied duplex, triplex, and quad plex's work via FHA.

As a lender I get this question a lot. This is what you can do: Since you did FHA, you can only finance one FHA at a time. Your next Loans would have to be conventional. If you do a single family not duplex or triplex and owner occupy it, you can stick with 5% down on your second one. If not you will need to come up with 20% minimum preferably 25% to keep the rate down. This would be more important if you are buying and holding. If you are flipping Rate really wouldn't matter but most banks frown upon this. Whatever you do, do not say it is a flip! It is simply an investment home. When the time is right to sell, your excuse is the home value rose so much it was dumb not to sell as early as you did. If you're a veteran you can look into VA lending or if the property is in the rural area, look into USDA. Both are 100% financing on owner occupied properties.

If your 3rd property you wish to purchase is going to be your primary owner occupied home...you CAN utilize only 5% down on a Single Family (non duplex or triplex) if you wanted. However, refinancing your first rental wouldn't be so bad of an idea. Could lower your rate but at least .5%. Just a thought.

Keith, regarding your question to Steve there are a lot of variables here. First things first I would consult with a tax advisor. You said you moved to NH, did you buy a home in NH or just renting right now? There are different tax implications to rolling the funds over from the sale of one property to a new property especially when it's your new owner occupied property. My initial answer was you would be taxed on the entire $100,000 but again there might be a way around it based on using a part of those funds for Down payment towards another property. I'm a nationwide lender (hybrid broker/lender) and have some advice for you. I would suggest selling your Maine property. Start looking at an FHA loan 3.5% down and purchasing a triplex or 4 (quad)plex living in one of the units and renting out the rest. The remaining funds can be used to repair or upgrade that 4 plex or buy another property. You can only have one FHA loan out at a time. So the remaining loans would have to be conventional 25% down for best rates or 20% down for slightly higher rates. Conventional rules state you can own 10 properties plus your primary residences. (11 total). Hope this helps. Contact me with any additional questions.

Originally posted by @Zach Adams:

Been working on this deal for a Triplex and heard from the son of the owner (who is the agent) that they would be open to seller financing the property. I can't qualify for a conventional/FHA right now (not enough cash) and was super excited about my first seller finance deal. But the father decided he needs the cash now and is already involved in another seller finance.

How can I arrange this deal to sweeten it for the father? To get a conventional on this I need 20% down. I don't know if between the seller carry and some additional cash I can get a conventional at 80% LTV and get him paid out at least 80%. Would this work?

This cannot be an owner occupied deal for me right now.  

Any advice is appreciated!

Zach, as a nationwide lender who primarily does conventional financing with some FHA mixed in from time to time, I can tell you all the ways you could get this done, but from the sounds of things you are going to need a private or portfolio lender. It would drastically help if you did an owner occupant triplex for at least one year. Go FHA only have to put down 3.5% and rent out the other two sides. I know you said this cannot be an owner occupied deal, but just wanted to make sure you knew your options. Conventional 20% down is possible but the rates are much better at 25% for investment properties. Not sure if this helped you at all but let me know if I can answer any more specific questions.

you will still have to do a personal guarantee