All Forum Posts by: Upen Patel

@Diante Lawrence You want to look for a lender that is Direct FHA approved (not all are), has FHA Fast Track loans, can do FHA loans at low credit and has minimal overlays.

Good luck,
Upen Patel

@Lynshy Henry It depends on how much you want to talk out and for how long. Mortgage rates are lower then HELOC, while HELOC closing costs are lower. Mortgage would be the right option if you are looking at a longer term.

If you are on your way to getting multiple properties, then I would suggest that you setup an LLC and move the properties under it. Initially you will have to get the loans in your name, and then transfer the title to the LLC. Eventually (2+ yrs) you will be able to portfolio loans. If you go this route, then be careful in selecting a lender who can get you a lone that will not be due when you transfer the deed to your LLC.

Good luck.
Upen Patel

@Anthony Gayden You have a few options:

• Get a portfolio loan, so some of the equity/appreciation on your current investment properties can be used towards the new one.
• Find a partner to makeup the difference to get to 25%.
• If the appraisal of the property is higher then the purchase price, then you might be able to "buy up" the rate (i.e. take higher mortgage rate) and get cash at closing to help with the closing cost/down payment. This is tricky, as guidelines need to be followed as to how much can be credited. A knowledgeable banker should be able to take your details and determine if this is an option.

Good Luck.

@Lucinda Harper Congratulations getting started early. I wish I was this smart when I was young. I am assuming that you are buying this as an owner occupied house. I am also assuming you have enough down payment (the amount depends on which program you go for: conventional or FHA). Have you worked? Have you had bills/credit cards? All that is credit history. Have you asked your parents to be co-signers? Check with lenders, local banks, credit unions. Don't the disheartened if they turn you down. Call the next one. Even if this falls through, you are starting early and have a long time to make it good.

Wish you prosperity and good luck.
Upen Patel

@Stas Finelt Based on your post you are looking for two things.

• You need a lender who will do a portfolio loan. For this to happen, your properties need to be under a business for at least 2+ years so that the business has a history/credit of its own. If you have not done this, then this might be your 1st step. Please do consult with your tax adviser and lawyer for specific advise. Once you have this (now or in the near future) lender would be able to issue you a portfolio loan.
• You need a lender who will do non-warrantable condo loans. Not all lenders will do these loans. Each situation is different. So when you find a condo that you like, you might want to check with the property management office if they know of any issues. If your realtor is worth anything, then he/she should be able to track this down as well. Assuming that there is an issue, you will need to work with your lender to go through their (each lender has their own) review/approval process. This takes time, so the sooner you get the process started the better.

Hope this is helpful.

Good luck.

Upen

@Kiel J. If you are looking at a conventional investment property mortgage, then you will need to put at least 25% down (i.e. $62.5 for $250k home). The rate for these mortgages are a bit higher. You could use 1% higher then a typical conventional loan to do your projections. It all depends on the circumstance of the borrower(s), loan and market, so no way to predict interest rate.

Good luck

@Sean Rogers If you are thinking about setting up LLC simply to protect your assets, then you can do that by getting an Umbrella Insurance (not Life Insurance). Umbrella Insurance extends the liability coverage amounts that your home insurance and landlord insurance policies will have. Its good to have an Umbrella policy to cover all your assets irrespective of how they are structured.
If you setup an LLC, then you don't have to setup individual ones, unless you want to isolate each property.
Here are a few ways I know of that you are protect yourself.

• Umbrella Insurance (This is what I am doing. I have 1 rental property). My recommendation is to get an Umbrella irrespective of you setting up an LLC.
• Do a single LLC and move assets into the LLC. Before you do the LLC, make sure your loans will not be due upon moving the title to the LLC.
• Setup individual LLC's for each property to isolate the properties. If you go down this route, then I would recommend that you setup a Master LLC that owns the individual asset LLCs. I know this would cost more. But the advantage would be that over time your LLC will have a history/credit of its own and you can get a portfolio loan against your assets.

Hope this is helpful and I did not confuse you more.

Good luck.

Upen Patel

@Mario Cruz

 What folks have said is spot on. Here is a summary with a few revisions and my addition: 

• With investment loans its a min of 25% down (not 20%).
• You can take out loans in your name if your income (W2/1099 + rental) supports it.
• Another option is to buy rental property with a conventional mortgage in your name and after closing transfer the title to a business name. You are still the guarantor, but the business starts building history/credit. You do this for 2+ yrs, and when you hit the limit to get loan in your name, you have a business that is ready to be able to get portfolio loan. Be careful to work with a mortgage banker who will get you a conventional loan that will not be due when you transfer title to your business.

Good luck.

Upen Patel