Rental Financing

[Jenny Gundersen]

I'm trying to turn my main residence into a rental and aquire another property,  live in it a year and then turn around and repeat the process. 

I'm wondering if anyone has some "creative financing" ideas and/or someone they recommend in Utah to help. 

Let me explain my problem.  I bought the house a little over two years ago, before deciding to invest and work on my real estate license. I bought the house for $208,000. I now owe $203,000 and properties on my street are on the market ranging from $220,000 to $230,000. Sounds pretty good so far,  right?  Well apparently, in my mortgage guidelines,  I'm not allowed to rent the property out. ... for the life of the loan! !!!  One mortgage company could refinance IF my name is taken off the loan but payment would stay the same at $1,452/month and the same rate of 4.62%. I've researched single family rental rates in my area and max I could get is $1500/month.  The numbers just are not adding up with the exception of property appreciation over time. Should I just sale this property and start over?  Does anyone have any other ideas I could use to keep the property?  I'm sure that I might be leaving crucial information out so let me know if you need more  information to help with this dilemma.  :) I would love to be able to keep the property. 

[William Hochstedler]

Hi Jenny,

There are lots of ways to acquire properties without banks, but it sounds like your strategy of occupying properties is to take advantage of owner occupant financing from those very same banks.  Great strategy that people here are calling "house hacking"

It sounds like you didn't buy this house with investing in mind and you'll probably run into debt/income ratio issues unless you get this house off the books.  So selling seems the obvious choice as cash flow is tenuous at best.

With that in mind, it sounds like this would be a great first listing when you get licensed up, putting a few more dollars in your pocket.

However, before you do anything, consult with a good mortgage lender to verify the no rental clause (which I've never heard of) and make sure your ongoing strategy is going to work for your rinse-and-repeat method.

Also, I don't understand what you mean by getting off the loan to refinance.  Who's the borrower on the new loan then?

Wm