And you have to wait 1 year before you sell or rent it out or face penalty of 2 years in federal prison and up to $250,000 fine. there are certain guidelines that would allow you to move out soon like moving for a job or a death in the family.So, technically, you're not supposed to rent out the house.

Check out the document at this link for some guidelines in your area.

@charles  you're doing the number correctly, the 50% rule is more of a guideline to let you know that you need to expect capital expenditures (HVAC/Roof/Foundation) in the future. so if you plan to save that money ahead of time, you have it when you need it. 

Hi folks, I was just shy of the finish line on a cash out refi on a rental I hold in an LLC...when today my Lender called and said a 'new Fannie Mae guideline' prohibits cash out refinances on properties owned through an LLC...so now according to him the ONLY way I can do the cash out refi is to quit claim to my personal name, let it season for 6 months, THEN do the cash out.  

I wish i would have found this website before because I didn't really assess the property income using the guidelines I've read here.Some background on my situation: my property is going to be a owner occupied rental and I chose the house more on the basis of me being happy living there, then NOI.

Typically most banks will waive that guideline once you hit 1 year seasoning.

It's not direct exposure to REI but because I work with a lot of investors, you can see those scenarios and get familiar with current lending trends, guidelines, and analysis. 

Yeah, that's because both of those rules are just lazy guidelines.

Rather than bringing home all that cash (read: tax money) and creating tons of new jobs here, my strong suspicion is perhaps only 10% of that money will be repatriated (some CEOs taking the gamble that they won't have another opportunity to bring it home at a lower rate in the future) and it will end up costing us jobs due to higher tax payments, not creating tons more as he thinks.

Win Win,, His past rent to previous owner is basically no concern of yours other than to know he's basically a squatter.. when his Dec rent is due.. like today,, and he doesn't pay in full by the (date per your state guidelines,,) usually by the 3rd or the 5th you give him pay or quit,, still no payment 24 hours later you file for eviction.