All Forum Posts by: Karen Johnson

Hello,

I'm in the process of purchasing a rental property in Pennsylvania and I want to make sure I have all the right licenses in place before renting it out. I'm purchasing the property in my name, not under an LLC or other business entity. I know what is required for my local municipality (Ambler Boro). I've been informed that Montgomery County only has requirements if the tenant has a housing voucher. When I was landlording in Philadelphia I needed a Commercial Activity License and some other permits/documentation from the city. Does anyone from this area know what other requirements I may need to meet in my new area? Thanks in advance.

I just wanted to say thank you @Shaun Weekes for your advice, which was very helpful. I got the final approval for my loan today and we are set to close on Friday as planned. I learned a lot from this process and from your replies. I don't plan on making the same mistakes again, and I think I'll be much better prepared whenever the next deal comes along.  Thanks again!

@Elizabeth Grahsl - thank you for this! I will call my realtor. I was thinking I should do this, so I appreciate the confirmation. If nothing else, perhaps the seller would be willing to push out the closing date so I can try to secure other funding. I really hope it doesn't come down to that, though.

There are some large amounts involved, and unfortunately because it's an investment property and not a personal residence they will not allow me to give a gift letter. The initial request they made was for a gift letter for the EMD, which I provided and they subsequently declined when the underwriter remembered it was an investment property.

I'm pulling together spreadsheets, bank statements, credit card receipts - basically anything I can think of right now. Thank you for your advice and I'll keep you posted!

Hi @Shaun Weekes,

Thanks so much for the response. I can't fault my loan officer because they DID advise me, but unfortunately a lot of the damage was done before we started the process. Unfortunately, these are personal accounts. I didn't realize that business accounts were exempt. I will have to open a business one for the future.

Striving to gather up all the documentation I have now, but will PM you when done. 

Appraisal is done and all set. If I pulled out of the deal now, wouldn't I still lose the EMD?

Hello,

Trying to secure a  mortgage for my first (deliberate) investment property and I made some mistakes. Now, I'm worried they won't approve the loan. Contract has financing contingency and contingency needs to be met in 2(!) days. If you summarize it, I really made 2 major mistakes (one of them repeatedly).

1 - Having someone else pay the earnest money deposit because I was out of town. Now, the lender needs to see me write them a check for this amount because they want to see that I did not borrow the money. It is that the money was actually owed to me, but there's no formal promissory note (short term family loan for real-estate related reasons). However, bank wants me to "re-pay" the funds for the sake of documentation. This would not be a problem if not for

2 - Moving lots of large amounts of money around in my accounts. All above board. All explainable. Not all easily documented. Largely done before we even found the property and after we were initially told conditions were all satisfied (but they were not). Now most of the money is in accounts not previously presented, and I'll need to explain (and document as well as I can) the transactions. That's the hard part.

My main concern - I'm going to try and document as much as I can. I'm not sure if it will be enough or not. I do have a financing contingency. as mentioned. If I don't get the commitment, what are my options, given that I am scheduled to close on 9/30? I believe I'm at risk of losing my earnest money. It will hurt if I do. 

Any advice for me? I'm already working on the documentation, but figured I'd post here in case there are options I haven't thought about. If there are any lenders reading this who want to PM me, I'm happy to explain in more detail to get the best advice possible.

@Kyle Kufeldt - congratulations and best wishes for continued success! I'm just starting out and I hope that I can experience similar growth and success as well.

Hi @Bob Tate! You're in my neck of the woods! We are looking to do more buy and hold (closing on our first property at the end of the month). However, we plan on doing a couple of flips next year to bring in more cash for another property or two. Germantown is a great place for fix and flip right now. That's one of the areas we are looking at for our flips. Feel free to connect with me if you're looking to network with other investors in the area. I'm brand new to this, but I'm looking to make connections so we can help each other grow!

Great pics, @Will Barnard! It looks gorgeous!

@Will Barnard - I just read this thread from start to finish. An unbelievable journey and such a cautionary tale and a learning tool for newer investors like myself. Thank you for taking the time to document this journey. I'm glad that you've come out victorious at the end of it all. Congratulations! I will be eagerly waiting for the photos from the rehab. Thanks again for sharing!

@Timothy Maloney -  I'll have to keep you in mind for the future.

@Matt Hummer - We're starting out in that area with a similar amount ($20K). We were thinking about doing a buy and hold, but on further consideration have opted to do a few JV flips to build up our resources. We close on the purchase of our first flip property on Friday and begin the rehab shortly thereafter. We partnered with someone who is providing the bulk of the funds and someone who is an experienced contractor and flipper. You actually bring more to the table in that you have some experience to leverage, whereas we mostly have money and a willingness to learn. I think it's a great way to get started. I'd love to be doing more, but this way we get some experience, earn some more money for future investing, and hopefully minimize our exposure at the same time. Best wishes, whichever way you decide to go.