All Forum Posts by: Trevor Alexander

The Knowledge Coop is the best -- they are based out of WA state I believe too. Very engaging/entertaining + great info. 

6 months for a cash-out refinance unless you qualify for a delayed financing exception (see guidelines below). There is no wait time for a R/T Refinance -- a Lender may tell you there is because it would be an early payoff and they lost the commission they made from that deal.

https://selling-guide.fanniema...

If the mortgage payments are being made, banks aren't going to touch it in my opinion...there are plenty of folks out there (even with a 3% rate) defaulting or are on the brink of defaulting, so the banks have enough on their hands without worrying about a performing mortgage.

I'm converting my OO residence to my first long-term rental property. Advice/pros/cons on hiring a property management company or doing it myself? Cash flow will be approx. $1,000 without accounting for property management fees or repairs. The house is only 1 year old. Going rate for property management fees where I live are 8-12%.

My main concern are doing upfront tasks myself (running background checks, screening, application, proper legal forms, etc.)

I know BP has forms I can buy for $99. Does that have everything you need to place a tenant and then from there it's just fielding calls and performing any repairs as needed?

Appreciate any insights!

Hi Justin -

Yes, a loss on your schedule E could potentially affect your financing on the next home if you don't have enough outside income to cover the DTI requirements. If you are purchasing a NOO, you can use 75% of the projected rents on that property to help offset your debt load.

Lenders will look at your net P/L on your schedule C to determine the income generated from the property. However, there are multiple addbacks to be included. Mortgage interest, homeowner's insurance, HOA fees, and property taxes are three of them. These will already be included in your DTI, so will not double count against you. The potential big one that can be added back in and not count as loss is Depreciation. Lastly, Renovation, and non recurring repairs can also be added back in. Be prepared to show documentation to prove to the Underwriter they are indeed non-recurring expenses that took place.

Simple scenario: let's say your schedule E shows a net loss of $20,000 for the year. But there's $15,000 in depreciation, and another $15,000 in non-recurring expenses - makes your net profit +$10,000 rather than -$20,000.

Hope that helps!

Technically can do it every 6 months if you want to.

It would only be easier if you were unable to qualify due to your DTI. Lower loan balance equals a lower mortgage payment which equals lower DTI.

Hi Alexander -

Look into an FHA Rehab (203K loan). Essentially, you can fund the loan with repairs still to be completed, and an FHA approved contractor has up to 6 months to complete the renovations outlined in the appraisal. The amount of money you'll have at your disposal will depend on the appraisal.

 You bet, I can shoot you a message.