All Forum Posts by: Timothy Colman

Originally posted by @Account Closed:

There are HML that have terms for longer than 12 months. We have 5 year loans.

 Thank you for that insight.  Can you provide the details on 90k hard money for five years?  I.e., interest rate, down payment, etc.?

That was my initial thought; however, he asked the lender if that was an option and they said no, due to the type of loan it is. He is unsure of his loan type, but did relate that the home was bought as a foreclosure (not sure if that matters).

Propranolol ;)

Hello all,

I have a unique situation that I am seeking advice for.  I will keep it short and to the point.

A close friend of mine desires to sell his town home to me for his current mortgage balance (90k).  The home was built in 08, is 3/2 about 2000 sf, and is in great condition.  An identical property a few houses down sold for 118k in 2015.  So, we are looking at roughly 25k in equity going in.

I am currently stationed in Japan and will be for another year and some change.  Therefore, the property will not be owner-occupied and eliminates government backed loans.  

It appears my only option is an investment loan with 20% down, which would be difficult for me to scrape together and then rent the property. A HML seems to be out of the question in that I will not be there within a year to refinance, etc.

What would you do? 

Hello Keith and thank you for the post.  I would imagine you contracted out the renovations you have listed above; did you utilize a contractor or multiple to complete the work?

Thanks,

Tim

Can you obtain a cash advance on your credit card?  You will have a higher interest rate (2% more I believe), but you would have the cash.

Some other options to raise the 50k are private lenders, hard money lenders, or friends/family.

Just a follow up:

I contacted Bob Hogue School of Real Estate in regard to how long the pre-licensing courses are "good for" as far as taking the exam. Here was their response:

"The Sales Associate course is only valid for 2 years from the date of completion and you must pass your state exam within that time frame or you'd be required to retake the entire class again."

Originally posted by @Darrel Maxam:

@Timothy Colman so what you are saying is that if I live in the home for a year /365 days in Atlanta  I can then technically convert it to a rental. Then I will be able to find another property in day 366 in Atlanta and then consider that my primary residence. Is that correct? 

My end goal is to acquire 10 properties all in the Atlanta market. With my strategy listed above is it possible. The reason why I am utilizing VA is because of the no money down factor.

 Try this link:

http://www.vanewsblog.com/2015/02/can-a-va-borrowe...

Apparently you can apply for a Interest Rate Reduction Refinancing Loan (IRRRL), which does not have the same occupancy requirements as the traditional VA loan.

In theory, you could purchase the property utilizing the traditional VA loan, with the intent to occupy the residence as your primary, complete renovations, then apply for the IRRRL.

I would also look into the BRRR method for your goal.

Originally posted by @Darrel Maxam:

I am in the process of purchasing a home that is VA backed that is 215k. It is a 3/2. And has an unfinished basement that made the home a duplex in the 80s. I plan on finishing the basement and converting it into a 3/1 or 3/2.

Am I able to convert it into a rental with me looking to purchase a property in the same area i.e.: ATLANTA. ?

 Just because the properties are physically located in Atlanta, GA, does not mean they qualify as your primary residence. You must live in the property for the majority of the year; i.e., 50% or more of the time.

Therefore, if you intend to immediately convert the property into a rental after renovations, then a VA backed loan is not for you.

However, if while you are completing the renovations and decide to live in the home for a year, then you could move out and convert the home to a rental. This would allow you to use the VA backed loan.

Otherwise, a conventional loan will allow you to convert the home immediately to a rental. Expect a higher down payment and interest rate.

Originally posted by @Darrel Maxam:

well I think that my goals are misunderstood. I am wondering if I am able to purchase homes in the Atlanta market using my VA loan. I am no longer enlisted in the military so I will not need to change my duty station. The process that I envision is purchasing a home that is VA backed. After the purchase the turn key home l plan on holding it and using it as a short term rental. My question is

How do I utilize my VA benefits to get another property in the Atlanta area in 12 months. Do I need to refinance to get it out of the VA status, which will allow me to utilize it for property #2?

As Walter pointed out above, you have $417,000 purchasing power the VA will back you on. Lets say your first property was purchased for 100k, that leaves you with 317k to be backed by the VA towards your next purchase.

As another pointed out, you will need to live in the home you intend to purchase for a year before converting it to a rental.

You could refinance your first property to a conventional loan, clearing up all of your eligibility (417k), but there doesn't seem to be a point to that.

To answer your question, you do not need to refinance to get out of VA status on your first home to utilize the VA loan again; unless, you have used all of the 417k benefits. How much was your first home purchased for utilizing the VA backing?