All Forum Posts by: Steve Muise

That should be 'appreciated' 

My primary of 25 years became my first rental when my wife and I moved this past spring.

3/2, 2150 SF all brick ranch built 1956 in Charlotte.  No mortgage. $2500/mo rent.

My options are:

1. Keep and continue to rent but house will need updating:

Original bath ($12 - $15 K) 

Kitchen cabinets/counter top (~ $20K)

HVAC & gas furnace ($8K -10K) 

Oversized vinyl windows in addition ($10 K)

Total $ 50 - 60K   

Roof, H2O heater 3 years old.

2. Sell (appraised for $380 K in 2016) and use $ for DP on new primary ($100 K - we're currently renting) plus DP on several more rental properties ($50K each).

A friend who is a property manager agrees that house will definitely need updating.  I can't see spending 2 years worth of rent on updates.  On the other hand, the house is in a neighborhood that's starting to see the knock downs and rebuilds and there's possibly more up side appreciation.

I'm leaning towards selling next spring when my tenant's lease is up and going with option #2.

I'd appreciate any feedback.  Thanks in advance !

Here's an answer I got from a lender when I questioned the rules for a cash out refi on my rental I recently deeded in to an LLC. I thought this may be helpful for others:

In regards to the question about seasoning. There are a few moving parts to your scenario.

Here are the rules.

If you are an individual and you purchase a property with cash, there is a 6 month waiting period before you can take cash out unless "the lender documents that the borrower acquired the property through an inheritance or was legally awarded the property (divorce, separation, or dissolution of a domestic partnership)." 

Based on our conversation, you didn't do either of the three.  What the guy is talking is this; you can refinance a property that was recently purchased, but you're going to be limited, within the first six months, to the purchase price as opposed to the appraised value, so technically he's right, but it doesn't work in your scenario.

Here's a scenario:

Many people purchase properties at discounted rates, renovate the properties and then try to use the new and improved appraised value for cash out. They can't. They have to wait six months if they want to base their new loan off the new appraised value. Because the property is in an LLC, you must take it out of the LLC
(because neither Fannie or Freddie will lend on loans in an LLC) and then wait the 6 months required to use the appraised value. Any transfer of ownership triggers the 6 month seasoning unless it's as described in the second paragraph above.

Here's the Fannie Mae eligibility matrix that's used by all lenders who sell to Fannie Mae as a basis for underwriting decisions before they add their own overlays.

https://www.fanniemae.com/content/guide/selling/b2/1.2/03.html

Can anyone recommend a lender in the Charlotte area who will do a cash out refi on rental that once was my primary (no mortgage) ?

Plan to use as DP on new primary as well as DP on several more buy & hold SFH rentals.

Thanks Greg.

Renting what was my primary home (no mortgage) after a move for wife's new job. I have $30k HELOC balance which will be paid off in 9 months.

Because house is valued ~$400k, I decided to put in an LLC along with umbrella policy.

We decided to rent for 1 year to make sure my wife liked her new job.  Plan on purchasing new primary next spring and hope to do cash out refi for DP on new primary as well as 2 - 3 more rentals.  

My bank is telling me refi on rental will be commercial loan and loan on property in an LLC will need 2 year history of cash flow - essentially they don't want to loan in my situation. My atty says we can pull home out of LLC when trying to secure loan next spring and put it back in afterward which seems fraudulent to me.

Both our credit scores in 800 range, income $200k (+), only debt is HELOC I mentioned above.

Advice on what to expect when looking to refi and where to go for loan ?

Thanks in advance for your feedback !

Rented out my primary home in Charlotte when my wife and I moved for her new job. $2500/mo. No mortgage. Not a fancy home just in a desirable area of Charlotte.

Trying to decide which direction to go for future rentals.

Have been considering more in Charlotte and/or Greenville, SC.

Options right now (1) PM on my home is a REI and knows Charlotte market. (2) Turnkey out of state (midwest). (3) Plan to attend Charlotte REI meeting(s) to try and make connections and weigh options.

Would like to hear back from vets on here.

http://thehousingbubbleblog.com/index.html

Thanks Mike.  Great info.  Millage for Lexington is actually .526216.  Tax value on house is 119,496 so:

$119,496 x .06 x.526216 = $3772

I mentioned in a previous post that I had a possible deal fall in my lap in Lexington, SC.  Perfect house for investor except...

The owner has been renting for 5 years and paying owner occupied property tax ($864 for 2016 according to tax card) and I calculate tax as rental will be $3844 for 2016.

MV ~$130K but deal is marginal at $110K and fair - good at $100K for investor.

How do investors compete against buyers looking to live in the home in SC when there's such a big difference in the tax rates?