All Forum Posts by: Scott Campbell

@Scott Campbell 

yes Fannie Mae is the only loan program that will do it on an investment property.  When your applying for a loan if it is within 100 miles of your primary residence (if you own your home) then it would automatically be considered an investment home, and won't be classified as a 2nd home unless it's in a vacation spot or something like that.  Since it's being classified as investment you can use the rent even without it being rented out or a signed lease.

Also, Fannie Mae is just a specific type of loan program. There is also Freddie Mac, FHA, VA, USDA, and then lenders that just write there own guidelines but the loan is not government insured so rates are usually higher. Each program has it's own little quirks on things.

If you want to apply for one you can call or email me at the info below, or PM

Joe

@Kathy Lu @Christopher Leon hello !  Can you tell me status on your loans? I'm asking because my husband and I found a home we would love to fix up and wanted to place a direct offer. We were told we would have to go through the homesearch auction process. We read the term and conditions and it seamed the buyer had no rights what so ever and that homesearch could pull or change the rules of the game at any point. This did not sit well with us because we are just two people who are looking to move into a bigger home. Not investors not real state agents. Our realtor has not done nearly the amount of research I have. The home has been empty for 4 years. Had water in the basement and drywall was removed April 2014. They said that was 10k. After being in the home the air was very stale. I would like a remediation quote on the home an inspection and appraisal. I'm willing to pay   For these services before I enter the auction just to make sure they can be fixed before I buy a money pit. Surprisingly we had a friend who is a home builder walk it with us and he said it was in amazing shape for being empty 4 years and encouraged us to make a move from his perspective.  I had to go through greenlight and our rep is very professional and has tried every angle to help us overcome our auction anxiety by reaching out to the listing agent and asking the asset managers to go direct to no avail. Meanwhile I went to the courthouse and asked for records. There were over a million in liens against the home. It is listed for 307 starting auction price is 160k. Auction started yesterday. I found on the internet that the house was in a sheriffs sale in 2010. So that might explain the 3-4 million that was wiped clean but what about the outstanding liens to totaling over a million. Where did they come from?  Gal at the courthouse said they were up to date as of July 10th. The greenlight rep said that the liens would be taken care of at escrow at closing and he was not aware of those liens or the mold removal. He said homesearch has never closed on a home without rectifying existing liens. If nationstar owns the property shouldn't they clear this stuff before putting it up for auction?  This house was auctioned in March  listed for 169k on 3/24. Sold for 169 on March 25 and was back on the market march 27 for 169k a month later went up to 291 and a month later landed at 307. Didn't the lien issue come up in march? So here are my burning questions if anyone can help me because I'm in love with this house but I've read all these horrible stories about nation-star and homesearch being a bad company and misleading people with paperwork not correct or incomplete or not disclosing all the details up front and asking for all this money and then when folks have a chance to read the paperwork they get after the auction they want to back out because the title wasn't cleared or whatever the case may be. I realize the risk you take on a property in foreclosure. What I  wasn't banking on was the conflict of interest between nation star homesearch and greenlight. It seems like a huge conflict of interest and I don't know legally how this is going on. Would I be bidding on the home or one of the many liens? Will those liens indeed be cleared at closing so the house is free of baggage? Has anyone ever bought a home through home searched and lived to tell about it? 

Any advice is welcomed before I drop a ton of money in an attorney to confirm something I'm already suspicious of? thank you in advance! 

I took out my paragraph on Section 8 and property values when i noticed you edited your previous post, but since you've mentioned it again... :-P

The literature on Section 8 and its effects on local rents and property values is mixed, mostly owing to the fact its tough to get enough good data on a homogeneous neighborhood over time to have any power to your statistical analysis. In the best studies, the ones that are able to get around this issue by having bigger better data sets, the research suggests Section 8 rentals in an area actually increase both property values and rent, despite popular opinion pieces, such as this fear mongering story where the only expert interviewed is an eviction lawyer:  http://www.abcactionnews.com/marketplace/law-tv/se... . Needless to say, there's nothing scientific or data based about an article like that. 

Now, why would this be the case? Aren't Section 8 rentals full of low income people who are, on average, tough on rentals which will bring down the look of a neighborhood? Well, sort of. In all but the major cities where FMRs aren't close to actual market rents, Section 8 rents actually encourages investors, like us, to purchase low cost properties in cheaper sections of town and raise rents to the Section 8 level, which in turn raises values because those properties are making good money. If your PHA is any good, they'll prevent slumlording through the inspection process, and over the course of time, property values rise, more people invest, and eventually rents rise to above Section 8 levels. Now, this is a general trend, we all can point to neighborhoods where this hasn't happened, but overall, this is the case. Also, it should go without saying that there are many many other factors that have an effect on local property values outside of affordable housing programs. 

If you'd like to take a read of some of the aforementioned research, try these: 

A list of articles I can't post due to journal subscription stuff, but are cited in a short explanation of values by Habitat for Humanity: http://www.habitat.org/how/propertyvalues.aspx

A working paper by NYU students that provides all the dense dry stuff I love, but bores most people to tears: http://furmancenter.org/files/publications/Does_Fe...

And finally, what should be considered a holy grail source for us here on BP, the National Association of Realtors agrees with me, and links to some of my favorite research (and opinion pieces for those who like more interesting writing): http://www.realtor.org/field-guides/field-guide-to...

@Scott Campbell

Remember at some point everyone on this site didnt know what earnest money was. I still remember asking my mentor what earnest money was. I suggest you get the 6th edition dictionary of real estate terms, its will be useful to you. The only bad questions are the ones not asked.  With that being said I will try to answer a few for you; here goes:

Earnest money is usually money required as an initial down payment that goes along with the purchase contract.  In your purchase contract it should state a time frame or conditions that need to be met in order for  you to either cancel the contract and receive 100% earnest money refund or it becomes the sellers should you not close on the purchase.  

Anyone who is getting a home inspection needs to have it completed within the due diligence period that is agreed on in the contract.  Usually its one of the first things done once a contract is accepted. 

For a typical closing, the people involved are the buyers closing attorney, the sellers closing attorney, the lender if financing is involved, and a Realtor if either buyer or seller has one for the transaction.  Title insurance is usually handled by the closing attorneys. 

Hope this helps you a little.

Scott Campbell

Fannie Mae will allow you to use 75% of the projected rental income on the property your buying, even without a history of rental income on your taxes. The appraiser will do a Rent Schedule form that says what they think the average rent in the area is. This should help your DTI problem