Investor · Elizabeth City, NC · Member since 2017 · 8 posts · 2 votes
Hello BP Family, I've been absent from BP for a while and just investing in my own markets for the last 5 years. We haven't purchased any investment properties within the last 2yrs, but we have tried, and they just didn't work out. I do have a closing scheduled for a commercial property next week. My husband and I have 21 doors and primarily duplexes. We concentrate on cash flow. We live in a small town, and I have my own subs, handymen and cleaners that can help me with our properties. It's a smooth and easy process.
My son will be attending college in Marietta, GA this fall so we wanted to purchase a duplex. We will be renting out rooms to other students and my son will help manage this rental. We just flew down to Marietta, GA on Friday and had our offer accepted Friday afternoon. We had our inspection on Saturday morning. All went well but there is a lot of rehab work that needs to be done.
Questions
1. Our community bank doesn't loan money out of state. Should we leverage other properties to finance this out-of-town duplex?
2. Try to do a conventional loan and finance it for 30 yrs with my son on the loan?
It's smart to save on dorm fees and just purchase the property. If I were you, I would work with a licensed mortgage broker to find a lender for this property.
I'm a private money broker, and private lenders are unlikely to lend on this one because they lend to non-owner occupied properties only. Your son living in the property will be considered a violation of that rule with most private lenders.
But I believe there are several institutional banks that will lend you the money and a licensed mortgage broker is the most efficient way to find them.
Hi Allison, I am going to echo Miranda above and suggest that you find a highly rated mortgage lender via Yelp or Google reviews, or from a Realtor referral. It is likely that the rates on your existing properties are lower than the rates available in today's market, so it would not be prudent to do "cash-out refi's" and pay off lower-rate loans. In addition, the interest rates associated with purchase money mortgages tend to be much lower than those associated with cash-out refi's. The exception would be if you are taking cash out from your primary residence.
@Allison Jones - if you/your husband have documented income, then you should definitely try financing this purchase as a primary residence for your son. With 21 doors, schedule E income may even get you across the line! You are looking at a minimum down payment of 15%. I operate in Georgia and am more than happy to have a conversation if you want to reach out!
@Allison Jones, You can possibly buy a house in Marietta using DSCR. Its a Non-QM Debt Service Coverage Ratio loan that allows you to qualify for a mortgage based on cash flow generated from an investment property – through a rental, as opposed to your personal income. A calculation generates a debt-to-income ratio and the higher the ratio, the better. The rstion can go as low as .75. I can send you a pm with more information.