All Forum Posts by: Sean Grapevine

Anything under 12% cash-on-cash for buy-and-hold is a waste of time in my mind. I can make close to that with much less risky investments than real estate.

For a flip transaction it's less about ROI then it is about profit per month of the deal. I'll take a slim $20k profit on a deal that I'm only holding for 30-60 days. That's $10k/month! If it's a lengthier rehab, say 6 months, then I try to net out at least $8k-$10k/month of hold time.

I think you're asking a really great question here. It's the right question for sure, one that others may have skipped over.

Can you find a similar neighborhood nearby to see if style is having an effect on value in those areas?

Also, I think it will depend on the quality and style of the interior finish as well. If your rehab brings it stylistically up-to-date, then that seems to be of utmost importance to buyers right now over and above the curb appeal. 

Curious to hear your decision!

You can keep the FHA loan on the departing residence. 100%, no doubt about it. Anyone suggesting otherwise is incorrect.

@Victor Adewunmi, They're interchangeable at the closing table, so I don't think it matters. However, if asked, make sure to slate the funds for your down payment. That way if your commission plus seller paid closing costs are higher than actual closing costs, then you won't have an excess of credits.

From a lending point of view, it is permissible to use your commission for closing costs or down payment on an FHA loan.

Is the rehab done? Put it in front of a local community bank or credit union and see what they can offer. I think that's definitely first priority. 

Hey everyone! I'm a broker here in Atlanta doing Hard Money up and down the East Coast. Here's what we offer!

Min LTV: 75%. No need to source or season funds at 70% or less LTV.

Min FICO: 600

Rates: 8.5% - 10.99%

Fees:

- $2,000 Underwriting Fee

- 3 to 4.5 Points in Origination

Properties Allowed: SFR, Condos, Townhouses, 2-4 Units

Prepay Penalty: No

12 & 24 Month IO or 3, 5, 7 year ARM fully amortizing (30 years).

Renovation: No rehab or reno funds available. Only minor deferred maintenance allowed.

Closing: 8 - 18 Days

Call, text, or email with questions!

Cameron,

Just a point of clarification, "private" mortgage insurance is only for non-Government (affectionately referred to as "govies" in the lending world). The Mortgage Insurance that FHA uses is a statutory MI set by HUD and FHA. It's in HUD's charter to keep a mortgage insurance reserve of 2% of all outstanding FHA mortgage debt.

Maybe a bit more than you needed to know, but it helps answer the second question. If a borrower defaults on a home, then FHA makes a claim against the MI reserve that HUD keeps. In the event of a market crash, there will be an uptick in defaults, and as a result, the MIP (mortgage insurance preimum) reserve will be drawn down.

Luckily, right now, there is a surplus of funds in reserve (hence the push for lower MIPs earlier this year), so the fund can likely weather a small downturn. However, premia are likely to increase in the face of a long term downturn.

Answer to question 1: Not currently tax deductible and not likely to be. There are no provisions in either the senate or house tax reform bills that address a change in MI premia being deductible.

Answer to quesiton 3: You can have two FHA loans at a time. You can maintain the FHA loan on a departing residence if: a) Your family increased in size, b)You are moving into a larger home, or c) You're moving more than 100 miles away.

Hope this helps!

You true net rental income takes into account your management fees...

The formula would be: Gross Rental Income - All Fees (Including Management Fees) = Net Income