All Forum Posts by: Richard C.

I wanted to piggyback on this topic, if going the LLC route, do you create an LLC before you purchase a property (so it'll be ready for the property to be put under the LLC before the closing process)? or is it something you put under your personal name and then transfer it to an LLC later? I was wondering if that would cause complications doing it later than before acquiring the property?

@Olivia Straka 

Welcome to BP!

I'm also from the Philadelphia area. I'm in the same boat, as I'm currently trying to soak as much information I can about real estate investing. Feel free to connect any time. Good luck on your journey! 

@Daniel Dubeck Welcome to BP! I'm a newbie here as well from Philadelphia. I just been listening to the podcasts, reading the beginners guide, and randomly reading a bunch of fourm posts trying to soak as much info as I can. Good luck on your journey! Feel free to connect anytime!

bump 

@Brie Schmidt thank you for the breakdown. I do understand loans are based upon Income and not savings. Reason being my question is about other ways of obtaining property and loans/mortgages when your income doesn't show much but you do have savings to work with.

Originally posted by @Brie Schmidt:

Originally posted by @Richard C.:

Hey all,

I have newbie question here. When trying to get a loan/mortgage for a property I'm assuming they will ask you for income proof or tax returns to see how much you're making and what can you qualify for, etc. My question is what if you have a good amount of savings saved up over the past couple of years for a down payment and also an excellent credit score,  but don't have a lot of income showing on your previous yearly tax returns? How are you still able to obtain the property with little income to show for, but a lump of cash in savings? 

 Loans approvals are based on your income, not savings.  

Take your provable monthly income before taxes and multiply by 45%.  Now decuct any payments that would appear on your credit (car payment, student loan, credit card min payment). What is left over is the max mortgage payment you can have.  

Let's just say if is $2600... In my area taxes are about $500 and insurance is $100 so that leaves me with $2,000 for principal and interest. I know conventional loans are $500 per $100k financed and FHA loans are $575 so that means I could get a $400k loan for conventional or about $350k for FHA

@Milad Keshavarz thanks for the reply. Can you explain more on how income may not be a factor and how can that be done if obtaining a property that is rented and can support the mortgage payments? What's the process like?

Originally posted by @Milad Keshavarz:

@Richard C.

Hi Richard,

Welcome to the community.  Are you trying to get conventional financing for a turn-key rental property?  In case of multi-family properties, your income may not be a huge issue if the property is fully rented and can comfortably support the mortgage payments.  I'm sure there are plenty of mortgage experts on BP that can give their input.

Good luck

Hey all,

I have newbie question here. When trying to get a loan/mortgage for a property I'm assuming they will ask you for income proof or tax returns to see how much you're making and what can you qualify for, etc. My question is what if you have a good amount of savings saved up over the past couple of years for a down payment and also an excellent credit score,  but don't have a lot of income showing on your previous yearly tax returns? How are you still able to obtain the property with little income to show for, but a lump of cash in savings? 

Thanks everyone for the warm welcome! I'll definitely be reading the beginners guide, listening the podcasts, and hopefully do some meet ups in the near future!