All Forum Posts by: Samuel Glantz

@Samuel Glantz - What is your focus for investing - cash flow, flipping, or appreciation?  Either way, you are looking at a great area.  I am a proud south side investor!

What part of town will you be visiting?

@Samuel Glantz

Banks have certain guidelines that they must follow before they will issue a loan.

conventional mortgages = have to follow Fannie Mae/Freddie Mac guidelines
Portfolio loans = have to follow guidelines created by the issuing bank or guidelines created by people who will purchase the loans on the secondary market.

With that said - you have a couple options about getting a loan

Acquire an investment property as tenants in common with your father. You and your father will both appear on mortgage documents, title, etc. You will have access to conventional mortgages. However, the mortgage may count as 1 mortgage for you and your father limiting you to getting 16 additional conventional mortgages instead of 17. If you do not have 1/2 the downpayment available; it may be an issue as Fannie/Freddie do not like gifts to cover down payment money.

Create an entity with you and your father as partners/members. The entity will be able to apply for a portfolio loan. There will be a cost of forming the LLC in addition portfolio loans are normally less attractive then conventional mortgages.

In regards to the tax question - the LLC will be a pass-through vehicle and there won't be any tax savings in your situation.

portfolio lenders have 30yr am but are more expensive.

Most are 5-7 or 10 year balloon. 

the other part you should consider is asset protection an LLC provides. I dont usually make decisions based on fear but simply having one affords A LOT of tax savings and puts up a little wall so other people cant get after the other assets.

The banks are going to want both of you to sign and then its a non issue with them.  

Otherwise if you want the asset in your name, you will need to transfer the money into your account 3 months before you apply for the loan so they dont think its a gift.  Then that entire deal will on paper be 100% yours.  Next deal can be 100% his.

But i have to ask....why dont you guys want to get a LLC? Portfolio loans are easier to get and deals are still good at 25yr am and higher interest rates. Getting a fannie or freddie loan saves a marginal amount of money when you look at the life of the asset.

So its either jump through a lot of hoops to get you both lined up with freddie loans or go get a LLC drawn up and go to local banks for the portfolio loan. Neither one is wrong, but one is certainly easier and safer if the partnership sours.