All Forum Posts by: Sam Fickel

@Andre Houston I'm on the other side of the state, I know a few realtors in your area but I don't know any tax pros. If you know any real estate investors nearby, ask them for a good CPA recommendation.

If a CPA does their job right, they'll maximize your deductions to avoid you paying taxes. But just like realtors and lenders, you want to find an investor-savvy CPA who knows how to structure your taxes in a way that minimizes your tax liability while also maximizing your qualifying income

@Andre Houston ok so depending on your timeline, assuming you can't create more qualifying income in a short period of time, you might want to talk to your CPA about how to structure your taxes next year. It might be worth paying more taxes (on your Schedule E) so you can use your rental income toward your DTI. Lenders can ignore the taxes, insurance, HOA, Depreciation, Depreciation, and Amortization, and a few other non-expense or duplicated deductions

You can use lease agreements to offset the mortgages on the investments to help you qualify for your next. Just know it's 75% of the gross rents OR a 1 or 2 year average of your Schedule E (rental income in your tax returns) after accounting for 75% of gross rents.

You can also use the prospective rental income on your next property.

So lucky for you, you only have to eat the payment of your primary residence.

Also, you can always do a HELOC on your properties with equity to use as a down payment. Especially if you use the BRRRR method, you can pay back that HELOC after you finish the cash out refi

What kind of appreciation is your market seeing? Is there a lot of housing demand that can continue to drive up the property's equity?

Why rent? Why not buy your next place? OR buy another investment? Or both?

What if you took out a HELOC against your current property, use enough of the proceeds for a down payment on your next home, and the remainder as a down payment for another investment. Now you have 3 properties in your name riding the market, instead of 1 and renting. And 2 of those are cash flowing.

Cons: you wouldn't have much equity in any of the properties for a few years and the second investment might not cash flow enough to break even on the HELOC payment, so talk to a few different local lenders for their opinion!

Just an idea

By the time I'm old and frail, I'd like to have $20,000 in passive income each month, with absolutely no debt.

I'll do this by building a portfolio of around 50-80 units that cash flow $200/month. Then, with a combination of selling off many of the properties and walking out with equity, and the Debt Snowball, I'll pay off the loans of my favorite units, to a point where I have 20 units cash flowing $1000/month and no mortgage on any if them.

Im dedicated to my career in lending so this might take several decades, and that's okay with me. I'm looking forward to the journey.

I'm on 100% commission right now, so my goal is the passive income stuff.

@Antonia Powell if your partner has cold hard cash, have them deposit it ASAP. If you're going for traditional financing, NO lenders will accept it.

For primary purchases, you can get around it by asking family for gift funds, then "gifting" the relative the cash later, so the lender can source the funds.

But for investment property loans, cash gifts are not allowed. Though, if you live there, it would be a primary.

If it's FHA you can do it with 3.5% down but you'll need a full month of bank statements from the family gift donor.

If it's conventional, you can get away with a withdrawal slip, but the down payment is 15% for a duplex and 25% for a 3-4 unit.

For 2-4 units with a non-occupant Co-borrower (aka your partner) you need to provide 3% of the down payment from your own funds.

Lastly, it might be tricky to have the realtor as a non-occupant Co-borrower. That's a new one, I'd have to look at the guidelines again for that.

@JR Rivas you can have anyone you want on title. You can even be added to title during the purchase, though if you already have final approval it might be a tad inconvenient to get the needed addenda and everything ready. I don't see why the lender would call the note due, though, I don't know what kind of lender you're dealing with.

Best to ask the lender (or the servicer if you've already closed)

@Jeff Shumway this^

This is going to depend on your risk tolerance and preferences, but I'm happy to provide my input.

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If I were in your shoes, I'd do the HELOC because of your interest in BRRRR. if you were trying to do a long term rental, I would do a cash-out refi on your primary residence.

8 years is a long time to wait to do 1 deal, so I would personally shy away from depending solely on cash flow.

With a HELOC, you can pay it off after you finish your brrrr and eliminate that extra payment. But if you do a cash out refi, you're stuck with the higher mortgage payment, even if you make the principle payment. Besides, on a HELOC you can use it multiple times to keep doing the last R.

Yes, the rates are generally higher and there are some more fees, but a HELOC can offer a lot more flexibility

@Matt Wells you can be added to title, but for the loan there would need to be a refinance.

It's better that way though. You have ownership interest in the property but aren't obligated on the debt, which frees you up for the future. I can't see how that would be a bad thing.