All Forum Posts by: Rashad Luckett

One consideration is how competitive your market is. My market is hot right now especially for investments. Cash is king here and you might have a hard time competing for the good deals if you are using financing. If you plan on using financing anyway, take advantage of the Delayed Financing exception and you can pay cash up front and get your purchase price + closing costs back relatively quickly as long as the deal is good enough. 

I am currently on rental #6 all but one using conventional fannie/freddie loans. When i first started and did not have my rental income reporting to schedule e yet, leases were used. If there was no lease, they would use the estimated rental income from the appraisal. With each property my dti has gotten better since the properties are cash flowing so i have no issue qualifying for income. One thing to be aware of is the reserves requirement once you have multiple financed properties. 

I always use an inspector and have an HVAC guy to come in as well on every property. It is a few hundred dollars that is well spent once a property is under contract. 

@Loren Thomas I just put a bid in on a property that was built in 1942. It has a fuse box so I am sure I need to upgrade the panel. Does that mean I also need to upgrade the wiring throughout the home? What kind of a price range should I expect for something like this?

@Chris Masons I would have to disagree that it becomes more difficult to qualify. I have found that my buying power in terms of DTI has actually increased as I acquired more. This is because even after the 75% reduction I still end up with a net rental income (after mortgage) amount which increases my income. However, if there is not enough of a spread between your rental amount and the mortgage that would become an issue.

@Pat Al I am currently doing this now. My wife is on the primary and the 5 rentals are in my name only. When we first purchased the primary, she qualified for the mortgage herself and I was added to the deed. However, lenders saw this (probably searching property records) and wanted to include the mortgage as a liability for me even though it was not on my credit and I was not on the mortgage. They stated I had ownership interest in the property so it had to be included. I have since removed my name from title for that reason. I still get questions from lenders though because they want to know about my primary residence. All I have had to do is write a letter of explanation (LOE) stating that I live with my wife, she is sole financially responsible for the property, I have no ownership interest in the property (not on title or mortgage), and she does not charge me rent. They will ask for proof of this and a mortgage statement showing just her name will suffice. 

Also, on the joint accounts, I typically have to provide an LOE signed by my wife stating I have full authority and access to use the funds as I see fit. I have done this several times and not had a problem.

Cell phone store (Boost, T-Mobile, etc....)

@Anthony White The appraised value matters because of the LTV. No matter what (using DFE) you can only get a max of what you paid plus closing costs. However, if the appraisal is too low to support that then you will get less.

Your example is correct. You would get your 42k (and no more) back as long as the property appraises for 56k or above. If it appraises below that you will get 75% of whatever that is. 

Another thing to keep in mind is that the DFE Refi will have closing costs as well and the cash you receive may be less than the loan amount of the refi. 

@Kay Khine I just closed on a delayed financing deal this week. I used @Harjeet Bhatti and she is excellent!