All Forum Posts by: Rebecca Styer

What did you end up doing? I was told the mini splits are not appropriate for colder climates like in Pennsylvania. The Gas powered wall heater sounds super interesting.

Robert, what site are you using for PA background checks?

Okay, I've done a lot of research and have scoured the forums, but I'm just not grasping the financing end of making deals.

My goal is to buy and hold a property to landlord.

I found an excellent deal and was ready to make an offer only to find myself going in circles with banks.

I formed an LLC months ago so that if I saw a great deal, I could pounce. I had spoken with my local bank and Wells Fargo and both confirmed that I would have to use a commerical mortgage because of the LLC but because the LLC had no credit, that I would still have to back the loan. No problem. I expected that from everything I've read.

When it came to actually making an offer I got a completely different story. Neither would work with the LLC at all and insisted that I create a personal loan. Wells Fargo ended it at that (not to mention I never spoke to a mortgage representative directly after being transferred 12 times and then stopping at a local branch) I think I just wasn't spending enough of money for them to even respect the deal.

My local bank was very kind and accommodateing but refused to give me any type of pre approval letter or document. They said that they don't do them for commerical loans! How can someone make an offer without any type of financial approval?

So I'm wondering if i'm just not a big enough investor yet to even use an LLC. I don't care about backing the loan, I just want protection against residents.

I saw folks mention they purchase property in their name and then transfer or title it to the LLC. However, there seems to be a lot of questions about how a bank would react to it and I saw no answers to those questions.

My lawyer explicity explained that my name should absolutey never go on anything in order for the LLC to truly protect me. I can't possibly follow this rule if I personally purchase the home and then deed it to the LLC can I?

I was attempting to finance 72K with a purchase price of 90K the property was a multi unit home valued at $150K. Credit isn't an issue (not that they even checked it anyway).

Am I over thinking this? Should this be something I shouldn't be worried about until later down the line? Are my deals too small?

What is a good resource to find other mortgage companies I can communicate with?

Thanks in advance.

Looking at the taxes as a percentage of income helps a LOT. I saw someone mention it a few posts back. They mentioned that the 50% guideline doesn't work when a property has taxes that exceed 25% of the income. So now I feel better understanding that is a lot of went wrong. I completely agree that expenses aren't any cheaper with a less expensive property.

Even if we utilized the Homepath renovation loan and brought the property closer to its assessed value (It's assessed for 58K) - We still couldn't charge $775 a month in rent for a 2 bedroom city row home (which is what the rent would have to be if it were 25% of the income of the property).

I used 50% of the income as all expenses in my calculation. However, I know it's just a guideline.

When my partner combined taxes and some projected expenditures it essentially plowed through 50% of the rental income.

I don't think $100/ month allotted for Maint. & repairs is unreasonable, toss taxes, trash and whatnot into the pile and the expense are easily beyond 50% of the income.

I'm just guessing the 50% rule just doesn't work as well for lower income numbers in calculating profitability.

So, I've been a member for a month or so and I've absorbed as much information as possible and I was feeling good about a particular property (this is actually my first post).

I ran some general numbers and felt comfortable with what I found but my partner ran the numbers and didn't see the profit in renting it out.

I'm just asking for some insight...

Purchase Price $35,000
Eligible for Homepath Mortgage 10% down with no PMI
Rent per month $650
I came up with a high cash on cash percentage using the 50% rule

My partner used the actual taxes $2323, insurance $432, Trash/ sewer $210, plus maintenance, repairs, legal, and accounting and it turned up in the red.

I used http://www.goodmortgage.com/Calculators/Investment_Property.html

and also came up in the red.

I'm just spinning my wheels. This property is a foreclosure and undervalued by 20K. I feel more than $650 a month in rent wouldn't be appropriate for the home. I'm not sure if the problem is that the taxes are high or if we are factoring in too much for expenses.

Is this a typical problem with homes that have such a low rent?

I also know the school taxes are slated to increase which just adds insult to injury.