All Forum Posts by: Preston Schmidt

If you are the sole 100% owner of the LLC you can title the loan in your LLC with you as the sole owner and do a residential loan to get the better rates/terms than commercial.

All around exteriors is a great exterior contractor and the owner has affiliates he can recommend to do interior work. Owners name is Charles Thayer. Tell him I sent you.

Interior or exterior work?

Good afternoon Matthew! I would love to connect. Welcome to BP and let me know if I can offer any assistance or education towards financing.

You're rate is kind of high so unless you refinance the property to a lower rate, I would say paying the balance down as fast as possible to create the greatest amount of equity you can would be a wise choice. Having an asset that is completely paid off and taking in full rent payments to increase your cash flow will be very beneficial if you have the capacity to do it.

No worries at all. I just am happy to help in anyway I can!

Okay that makes sense on the 6 month confusion. As for the income to be used you can use 75% of the market rent for your property should receive towards your ratios with no landlord experience. Assuming a 25% vacancy rate year after year. But if it is your primary residence, you cannot use any rental income because that should be an investment property and not your property address. Unless I am misunderstanding. They wont even look at contract for deeds.

Thank you Michael Sato. I am liking this site already.

I am confused on this question. If you are going to purchase the home how can it be a refinance? To answer your question, on purchases they take the lower of the two values, agreed upon purchase price or appraised value. Refinances always go off of the appraised value.

Kyle,

Do you typically see new investors taking out FHA loans? A new investor with a solid credit score and excellent reserves and DTI ratio would be wise to go conventional. But to answer your question directly, I would say yes simply because FHA is a little more relaxed than conventional when it comes to multi unit properties/investment properties.

Or are there experienced investors also using them? Yes even experienced investors use them because of the amount of "good debt" they take on, they are still higher risk and may still only be able to qualify for FHA since it is government insured, but again every situation is different.

Also, how much would you estimate that the mortgage insurance raises your monthly payment? The monthly mortgage insurance or Up Front Mortgage Insurance that gets rolled in (UFMIP)? Monthly would vary depending on the interest rate and loan amount. UFMIP maybe brings the payment up $20-$30 per month but again also depends on the loan amount.

Or how much does it add on to your APR? This is a good question. Most people worry about the interest rate on the loan more than anything but they forget to focus on what the Annual Percentage Rate (APR) is. The APR is taking in all closing costs, all UFMIP, monthly MI, and interest rate all into account and re-amortizing the loan over 360 months (30 years) which would lead to a much higher APR. Granted if your pay the loan off early  or a big chunk of principle the APR no longer applies unless you re-amortize it over the remainder number of years. Long answer short, it affects it a lot. Say you are given a 3.875% interest rate but with everything added in, your APR may look like 4.625%