All Forum Posts by: Rav Ram

Does anyone know how to get one insurance policy that covers everybody at the get go? I can't seem to find this.

As the seller, I need to have the insurance for my original lender, but i want to cover the buyer, and myself in case of loss.

I'm in the process of getting a 30 year fixed loan, then doing a wrap around mortgage to a buyer. The problem is that the lender is requesting insurance, and apparently, according to my attorney, after I do the wrap around mortgage, the borrower also needs to have their own insurance as well because my insurance won't cover them (or maybe not even me) because i no longer own the property. I gogled it, and i'm not seeing any providers of insurance that allow you to cover your new buyers as well as you to avoid buying double property insurance.

PLEASE HELP!!!!

Please let me know if anyone has this experience

Thanks

Hello Fellow Members,

I am considering doing a cash-out-refi on 2 of my properties. Assuming my credit and everything else is good, I need to see if others have experienced what i'm experiencing. I want to preface this by saying I know that i'm lucky to even have this option... My issue is not with the rates, but the upfront hit i'm taking.

I have not done any cash out refinances and was told I can qualify for 4+. I wanted to know if the fees that i'm being quoted are negotiable if I shop around or if I should just be happy. It really sounds crazy and strange. I cannot believe that for a $200K property value, pulling out $149K (loan amount) the total fees to cash out are $6,240 and for a $115K value property pulling out $86K (loan amount) the fees are $5,219. It's in the state of Texas. The rates are 30 year 4% and 15 year 4.625%.

Here are the breakdown of the fees

Processing $520

Underwriting $775

Warehousing $200

Leder Doc Prep Fee $350

Point Charged $1,492

Appraisal $610

Credit Report $15

Closing/Escrow Fee $350

Attorney $125

Lender title ins $1,150

Courier fee $25

Tax Cert $50

State of tx gty fee $10

E-Filing Fee $15

Survey $395

Mortgage Recording charge $120

Daily Interest $38

Total Fees $6,239.77

That's nearly 4.19% of the total amount of the loan!!!!

Because i've been used to dealing with cash only and lines of credit, i wanted to ask others in this community on whether other lenders will drop some of the other fees.

Thanks!

----> RE: Michael: Why pay down the loans at an accelerated pace if you're just going to fully leverage the property again?

These properties can cash flow and be paid off in 10 or less years. Should i take 30 years to pay them or pay them off quicker and then pull $ out again. I don't know this one...I figure interest expense lowers income, the higher the expense, the lower the income, and then do it over and over?

Hello Fellow Investors (Warning: this somewhat advanced but could be genius with your feedback, so be patient)

I have been giving this strategy a lot of thought, and would like everyone's feedback. After selling 2 of my rentals because "i hated my tenants," I realized that i really didn't make much after: 1) having to repair the house again after the tenant moved out and 2) paying concessions and closing costs; 3) depreciatin recapture.. I then began to think of a way for it to make sense...maybe as much as sense as 20-30% flipping.

So here is the strategy with an example: Buy all cash at $85K (get most discount), fix for $15K. ARV is $130K. This should be rented for $1,000+. After 6 mos-1 year (sufficient seasoning), pull the money out with either Fannie Mae financing or a local lender (4-6%). They will give you 75-80% of value after seasoning period (or more), which is $100-104K. Remember, you are in this property for $100K to begin with, and after 1 year you get your money back, you still have 30K of equity in the house, and you are at least cash flowing positive (this must be the case with all loan/taxes/insurance/management payments). Ten years go by, and you own the house again because the loan is paid down (give or take 5 years really depending on market).

Then you go to refinance the house again (not sell, refinance) and can pull another $100K or more (if property appreciated) out of the house. Wait a a minute... You pull out $100K and you pay no tax on the $100K because it's a loan not a sale. So, every 10-15 years you can pull out $100K on this house and not pay tax. So, you do this with 10 houses and you're pulling out a lot of cash over the years all tax free. It's like looking at each house you buy as 4 houses you just made money on (over a 40-60 year span, then to ur kids).

(items not considered:1) repairs over the years after tenants leave. 2)If you can't buy with cash, so what, the calculations will be a little off. But the idea is still the same.3) It won't work in CA or high price markets that don't cash flow; 4) you are limited to the number of houses under fannie mae; 5)

Please let me know what is wrong with this model, and if you have a better model, or other ideas, please let me know. What i didn't say is that i will be doing other flips along the way with other funds in order to get more rentals.

Thanks everyone

I would like to find an assistant, company or website that can help me put together the mailing, obtaining of lists, and putting the mailings on a schedule somehow at a reasonable cost. Does anyone know a good vendor? Or if you are doing this for yourself and can help me as well, i would be open to getting your help!

I am interested in this for getting tear down properties, fire damage, or lots...

Direct mail is so important, but it takes a formula.

Please help.

I'm pulling funds out of my Line of Credit to buy and fix a house, then I want to get long term financing through Fannie via a partner/investor because i can't get anymore Fannie loans under my name. I'm definitely not interested in anything that is not allowed, so how do i do it!!!

I have spent 3 months researching and meeting banks and mortgage people... Getting 10 loans is doable if the person is making a lot of money sufficient to cover debt to income ratio limits set by Fannie Mae. They have to have a certain amount of reserves.

With $500K line of credit, you buy 5-8 more properties in the $50-80K range, fix them and put them on the market. Even if you do this 2 times a year, you will eventually run out of money. There's no question there is a high compounding (and crazy tax) consequence, but you will run out of money... I don't care how smart you are!!!

I think the new strategy is to use the line of credit to buy-fix homes, get them Rented and quickly get partner/investors to buy and into these mortgages! My challenge is how to structure this and how to find people. For example, lets say I find someone who says "I will use my credit and put up some cash." OK... So, I have 10 questions:

1) If the partner/investor is getting the loan, who's name is the property under if the loan is in his name alone? Is it allowed to be transferred into an LLC Afterwards mutually owned by us?

2) Can I sell a property to a partner/investor who will get a Fannie Mae loan, and then still have a % ownership/partnership interest in the new property because then i technically become the buyer and seller?

3) What should the split be between us?

4) How do i market to find these types of people?

Those are some questions I have!

Hello BP Readers,

I have been involved in the RE field now for 2.5 years. After purchasing 10+ out of state properties with all cash in the $50-100K range, i ran out of funds. I then obtained $500K LOC (Line of Credit) against 6 of the rental properties and started doing Flips. Again, i'm running out of funds.... but doing well.

I have been thinking of somehow taking advantage of the golden 4% 30 year fixed opportunity of Fannie Mae loans by somehow teaming up with other investors who want to use their credit to get up to 10 Properties in their portfolio.... Here are my challenges, and I would love all advice, thoughts and wisdom on this topic. My goal is to get into more properties initially with cash purchases --> Rehab --> Refi/cash out...

1) Can I refi/cash out out of a property if i'm the seller and I partner with the buyer? If the buyer were to sign for the loan, I could put the down payment. I would be selling my current property to him for FMV (Fair Market Value). This would allow me to continue buying with cash and within 3 months sell and do it over and over. I'm not even sure if it's legal, but most of the types of properties i'm buying don't qualify for Fannie Mae up front and need some rehabbing.

2) How Do i find people who want to use their credit to obtain a loan and I can put part of the down payment and do all the work? I just need bodies with ability to get loans to take up to 10 properties... The returns are very good, but I just don't know how to find people!

3) what am i not seeing!!!

Thanks so much!