All Forum Posts by: Shaun Weekes

So if you have 4 properties financed or less you can take cash out on any of them.  But when you have 5 or more financed properties you can only take cash out on the property if you've owned it for less than 6 months.  That is the Fannie rule for delayed financing.

Original purchase transaction was an arms-length transaction.

Original purchase is documented by a HUD-1, which confirms that no mortgage

financing was used to obtain the subject property. (A recorded trustee’s deed or similar

alternative confirming amount paid by grantee to trustee may be substituted for a HUD-

1) Preliminary title search or report must confirm there are no existing liens on the

subject property

Sources of funds for purchase transaction are documented

If the source of funds used to acquire the property was an unsecured loan or a loan

secured by an asset other than the subject property, the HUD-1for the refi transaction

must reflect all cash-out proceeds be used to pay down, if applicable, the loan used to

purchase the property. Any payments on the balance remaining from the original loan

must be included in the DTI ratio calculation for the refi transaction.

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Funds received as gifts and used to purchase the property may not be

reimbursed with proceeds of the new mortgage loan

The new loan amount can be no more than the actual documented amount of the

borrower’s initial investment in purchasing the property plus the financing of closing

costs, prepaid fees, and point on the new mortgage loan.

All other cash-out refinance eligibility requirements are met

*Cash-Out Fixed 1-Unit 70/70/70 720

*Cash-Out ARM 1-Unit 60/60/60 720

*Cash-Out Fixed 2-4 Unit 65/65/65 720

*Cash-Out ARM 2-4 Unit 60/60/60 720

If the subject property is a second home: 2 months' PITIA reserves on the subject property

Subject property is an investment property: 6 months' PITIA reserves on the subject

property;

In addition to the above reserve requirements the borrower must also have 6 months'

PITIA reserves on every other financed second home and investment property

I personaly think UOPM ( use other people money ) to make money. So if you can get 200K  in cash out at 5% and make 8,9,10% or more on it then it makes sense. 

Feel free to contact me if you'd like to talk further as this is a lot of infrormation Sir.

Good Evening Mike,

If you've been self employed for at least 2 years you can do a loan through Freddie Mac and they have a 1 yr tax return program for self employed borrowers.  So you can use the income from you last return and show that you've been in business for 2 years ( maybe a business license that is at least two years old ) so keep me posted on your progress and I wish you luck.  I'm here to help as well Sir.

You're welcome Sir.

PMI is a set rate depending on how much you put down and what the loan terms are.

Mortgage insurance isn't a lifetime thing depending on how much you put down and what the loan term is. 

For example if you put down at least 10% you will have PMI for 11 yrs and your PMI rate will be less as well.

If you have anymore questions we're all here to help.

Wholesale lenders go down to 50K typically but if you find a local bank that might be the place to go with your deal.

Second Mortgages and or HELOC's are a might be a good options as well since they're lower loan amounts requirements.

So the only time you can get cash out on 5-10 properties is if you've owned the home for less than 6 months and qualify for all the delayed financing guides. 

If any of your homes are owned by fannie or freddie you can use DU refi plus or LP open access and they don't care how many homes you have.  However you can only do rate and term refinances.  You can look this up by going to google and typing in the following:

Fannie mae loan lookup and freddi mac loan lookup. 

Oh I just saw that you're loans are all private or owner financed.  Damm...

Well you can try to move money around to pay off mortgage debt to see if you can get under 10 loans or look for a lender that will do a blanket loan on all or most of your homes.

Hello Matt,

If you buy an investment property now this is what you'll be looking at.  Assuming you own more than one property you'll have to show reserves of at least 6 months for every rental you have.  Plus you can only use 75% of the rental income towards your income. 

So if you buy a 100K home and you put down 20K you'll have a mortgage of 80K @ 5% for this example your payment would be $429 and say the rent is $600 you can use 75% of that which is $450.

If you make 2K a month here is the DTI breakdown which should be your biggest concern with what you're trying to do.

2K + $450= $2,450 of income

Debt: 429 + ( New home payment ( $750) ) = $1,179.00 

New home would be the primary residence that you talked about buying.

Assuming you have no car payments or c.c. payments or personal loans your debt to income ratio would be 48.1% which is acceptable under FHA guides ( up to 54.9% ) but pretty high for conventional ( 43 and under is pretty secure but I've seen up 49% with major reserves) You would also need 429 x 6 = $2,574.00 in reserves for your Investment Property

6 months of reserves = $2,574.00

Total income $2,000 base + $450 ( 75% of 600 )

Liabilities = $1,179.00

I know sometime I'm all over the place but plug in your real numbers with these and add taxes, insurance and credit cards, car payments and any personal loans and try to keep your total DTI under 43%

For taxes do 1.25% x the sales price and .3% x the sales price for Home Owners Insurance.  The HOI calculation is a bit high but that is better than under estimating.

I would also buy the homes all this year becasue if you buy some this year and some next year, depending on the time of year you'll need to show your schedule E income and that will be a totally different calculation. 

If you need me clear anything up just email me or post it on here :)

Welcome Cameron,

This site is great and the feedback is great too.  I hope you have a lot of fun and make a lot of money.

I just checked the Fannie and Freddie guides on this and you're looking at 15% down for Fannie and 20% down for Freddie on a 2 unit purchase.

So unless you can find a portfolio lender doing this type of loan you're looking at the next option below. 

FHA at 3.5% down is going to be your best bet. I know the UFMIP is 1.75% ( Up Front Mortgage Insurance Premium ) and your MI payment is going to be 1.35% ( Mortgage Insurance ) but with rates in the mid 3's you're looking at a blended rate of less than 5%

Talk to a tax proffesional and see if you would be able to write off some fees.  Then you're golden.

Let me know if you need help with anything else Sir. 

Hello Jered,

It looks like you have the refinance aspect of this under control.  If you can get conventional financing I would just go that route.  Just remember the financed properties rule that Fannie has.

You can have four financed properties with no issue.  If you want to get 5-10 you'll have to refinance the properties with six months of purchasing the home.  This is called delayed financing and it works great as long as you meet all the guides and do it in less than 6 months from the purchase date.

You look like you're on your way and good luck to you Sir.