All Forum Posts by: Rich Littlefield

The differences are:
1. On an FHA offer the buyers agent gives the seller a notice that in no circumstances may the keep the deposit or any part of it. (Or they are supposed to, they do not always do so.)
2. The appraiser is going to be looking at the repairs that may be needed more closely. Most of those repairs will need to be addressed before the loan can close.
To answer your question then, I suppose you can make a non-contingent offer on either one, on either one the financing may require the home to be sold, so  you can possibly use the loan contingency to back out on.
To answer your other question a Conventional offer allows the seller to keep your deposit if you do not perform.  So you will always have a stronger offer if it is a conventional offer.
That said I have completed about 80  real estate transactions not counting loans, I have never had anyone keep a deposit of my customers.  Though I have had to fight and scrap a couple of times.
I actually only do lending at this time, though I am a member of the board of Realtors.
Let us say you were taking offers, if you got two exact offers, except one put up $50,000 as a good faith deposit, the other put up $100 which would you take?
Find out what the rules are for getting your deposit back in your state, then make the biggest deposit possible. I have had people accept my offer over higher priced offers this way.

Sorry no.  When you finance a rental, they are going to have a minimum down, mostly I see 20% seems to be the minimum. So  you can not say, I am only putting down 15% because I need to cover the rent for a couple of months.

I have made a couple of loans on this kind of thing in the past. The borrowers seemed to be doing quite well with it .

Here is one idea for you
If you buy a fixer, you can get one for 10% down  plus expenses.  It is a bit complex, and you need reserves because the cash flow is not immediate.
Let say you buy a home for $100,000 and needs $20,000 in work, but will be worth $200,000 when completed.
The down payment would be $12,000 plus closing costs, which can be expensive. Lender fees on these are higher because they are a lot of work. Take a lot of time.
You need an appraisal that will cover AS IS and future values. ($850 is common)  You will have a facilitator, who will estimate the cost of the improvements you are making.
Most of these kind of lenders (not all) require you hire a contractor to do the work, or show that you have the experience to make sure the work is done to code.
The other issue I have found is that the money for the improvements is only available after the improvements are made, but can be made in draws.  Every time a draw is made there is an appraisal  inspection and a fee from the appraiser before the money is released.  If your contractor will pay the cost of the improvement up front, this is not a problem, most contractors wand some money up front so you need to communicate with the contractor.
The thing is on this example, you would end up with $100,000 in equity for an investment of about $20,000. Most areas will cost more because in most areas properties are more expensive.  I just  used $100,000 because it makes it easier to understand.

You may be able to get the lender to call it a 2nd home, and get a better rate.

The only  issue I can see on this, is that they want the DSR of 1.20   The formula is:
DSR= Net operating income / debt service.
So you take the lease amount - expenses ( Some lenders require a management expense.) Then divide that number into the PITI  or basically the net income must exceed the debt service by 120%
The problem may be that you do not have enough income from the one lease  you have to cover it. Therefore once your Mother moves out, and you have a new tenant with a signed lease.
Also be aware the lender will  have the appraiser to a "rental survey" to be sure the rental rate is a market rate. So an inflated rental agreement will probably not work.
Do a title search, make sure there are no  tax liens on it. The IRS will sometimes sneak one on there if the taxes have not been filed for while.

I would ask first what kind of property, is it a SFR? Because that will make all the difference, where you go looking for a loan.

There is a difference between HELOC's depending on if you are living in the property or not. Though the owner occupied one will be cheaper, they may call it due if you move out. So you may be better off getting a commercial line of credit as they are not too much more expensive and will extend on after you move out.

I can originate Commercial loans in all 50 states.  I would love to compete for your business.

If I understand your question, it sounds like you want to buy a home as a rental using a VA loan.
Here is the thing you have to live in the house, so your way around that is to buy 2-4 units rent out the other units.
The good news is that buying units is one of the best investments you can possibly make, long term.
VA loans are some of the least expensive loans anywhere,  you get a lower rate and no ongoing mortgage insurance, there is an upfront insurance fee.
Also the first time you use the VA loan the the upfront fee is less, if you're a disabled vet they wave it.
I can only do VA loans in California, but I am willing to help you review your situation and consider your options. Regardless of where you are at. Feel free to contact me.
Either way good luck on your investment!