All Forum Posts by: Shawn Long

 There is typically a max value on what you are allowed to gift or be gifted. This would likely be a taxable event. I would start by getting all the information available on that. Even if it works via a "loophole" on paper the state /county and/or the lender may not accept it. Cross your T's and dot your I's on this one. Then revisit the rest of the strategy. You need to attack this like a detective, leave no stone unturned. Call and ask! Call the lender you're considering to work with and let them know upfront what your intentions are. That's the best way to avoid trouble with the refinance. The lenders requirements for refinance in a given situation are probably the most important. Call the county and ask them what happens if you gift or get gifted a property worth "$XXX". The rules are slightly and sometimes largely different by locale

 We would be happy to do construction escrow, but the conversations never really developed that far. I imagine because the town specifically is struggling with commercial and business as a whole. Bad credit actually means no credit. He's new to success and although we have done well and made money and he paid off some old credit card debt a year ago he hasn't worked on building credit and it didn't improve much. He is on a path to building credit now but we need the timeline for the project to go faster then the credit building.

 I knew that! Lol. Thank you sir, it all came back to me when I read your comment

 The 2 lenders we spoke with so far are scared of the word "commercial" right now even though it's mixed use. I'm sure his bad credit doesn't help either

 I'll 2nd Caleb, he nailed the main property concerns. Indy markets differ, not sure about Cincinnati. The most important question to ask  yourself is are these home ages typical in the area. Put yourself in a buyers shoes, if 100 yr old homes aren't the norm you made have a hard time flipping it. On the other side of the coin, if you plan on a long term buy and hold you should fix 100% of the problems immediately and that should be factored into your budget. Otherwise the property will nickel and dime you over the years. Knob & tube is always a deal breaker for me. Any excessive water damage I avoid as well. If you can get the property into perfect condition and it pencils, then go for it

 Property is worth upward of $500K. Just using the 1% rule puts it at $300K+ at the moment with half vacancy. Yes we are finishing the other units to get them occupied. We have strong, long term commercial anchor tenants in place on 5 yr escalating leases. 

The FHA question is completely unrelated. The $50K is to finish the residential units in the building

 I think the local market matters a lot here. Can you share what city/state in the midwest?

(For my client) Own a mixed-use property free and clear that is currently bringing in $3,150 per month and is 40-50% occupied in central Indiana. Client has bad credit. Is there a lender out there that can help him turn $50K from equity into cash so we can finish the project? 

Also can someone tell me if a buyer can get an FHA loan on a multi-use property? Shame on me for not remembering