Retired and Getting a Loan - Possible?

7 Replies

I'll be "retiring" to flip full time starting in August. I'll be moving to a new area (from Florida to Tennessee), and would much rather purchase a home than rent. Say I found a home I like for $200,000. Would a bank be willing to lend money if I were to put down $100,000, a 50% LTV? I'd kind of like to go with a conventional loan, because I want the lowest rate possible.(My current home is FHA financed and I don't think I can have two FHA loans, can I?)

It's the income piece that is stumping me. I have enough money in my solo 401k to retire now but how much is enough? Do I have to be able to pull $2,000, $3,000 or more out of my 401k for the entire term of the loan? I'll be collecting about $1800 in SS but not for another 3 years (I'm 59 1/2 now) .

Any other financing options I might have? Just can't stand the thought of renting at this stage of my life.

Oh almost forgot. I have a 720-ish credit score and no debt besides my home here in Florida, which I will be keeping as a rental. That will pretty much be a wash, but this area is booming, and I want to keep the property for equity buildup/appreciation purposes.

Thanks

The good thing about renting is you can figure out where you want to live first.  There might be some areas of some cities you might not like.  I always tell my tenants if you buy from me, you can tear up your lease for free.  I'm in Humphreys County.  What area are you moving to?

Thank you for the replies .  I'll be moving to Murfreesboro , Rutherford County . I live there for almost 20 years  in the 80s and 90s  and really enjoyed it but was forced to move  for employment purposes . Now that I'm  going to retire  I would much prefer there  rather than Florida where I am

Rutherford county and Murfreesboro are a different world from the 80s and 90s. It’s one of the fastest growing counties in state if not the country. I’d be interested to hear your perspective on it having lived here 20 years ago. 

Where are you wanting to flip?

I know this doesn’t answer any of your financing questions. Just wanting to meet and get info from others in the area.

Originally posted by @Robert Reineri :

I'll be "retiring" to flip full time starting in August. I'll be moving to a new area (from Florida to Tennessee), and would much rather purchase a home than rent. Say I found a home I like for $200,000. Would a bank be willing to lend money if I were to put down $100,000, a 50% LTV? I'd kind of like to go with a conventional loan, because I want the lowest rate possible.(My current home is FHA financed and I don't think I can have two FHA loans, can I?)

It's the income piece that is stumping me. I have enough money in my solo 401k to retire now but how much is enough? Do I have to be able to pull $2,000, $3,000 or more out of my 401k for the entire term of the loan? I'll be collecting about $1800 in SS but not for another 3 years (I'm 59 1/2 now) .

Any other financing options I might have? Just can't stand the thought of renting at this stage of my life.

Oh almost forgot. I have a 720-ish credit score and no debt besides my home here in Florida, which I will be keeping as a rental. That will pretty much be a wash, but this area is booming, and I want to keep the property for equity buildup/appreciation purposes.

Thanks

 It's not possible to know if $2k or $1800 or $4k will be "enough" without knowing a bunch of information you didn't post, but SS and 401k income for retired people does "count" as income for vanilla mortgage purposes. 

Perhaps you can work past August and save up enough cash to fund your first flip before retiring. Then keep adding to your proceeds from the first flip to fund the second and so on. Or sell your current house and use that equity plus the money you already have saved up to buy.

Thanks for the reply Amy.  My employer is closing shop and moving. I'd have to move to Silicon Valley to keep my job, so I took the early retirement option they offered. There is no way I could afford to live in the Bay area even if I wanted to.

I actually do have enough cash outside my 401k to fund the first flip, but in my current market, it may well take months to find a deal. In the meantime I also have to use some of  that money to live on. If I get lucky and find a deal right off the bat, I could make it work. I'm a very conservative planner though. I plan for the worst, but expect the best ;-) I'm already doing a dedicated search for something to buy.