small time/part time long view investor

7 Replies

Hi All.  I purchased a 2 family home in 2010 and lived in and renovated over the last 4 years.  This year (2015) was the first year I had both units rented (vice owner occupied)  I moved in with my gf (soon to be fiance/wife).  We are relocating to Cape Cod and plan on renting her 2 bedroom cape.  Both properties (mine and hers) will rent easily long term.  Mines got 10 years left on a 15 year loan and hers as 25 on a 30. We're exploring options for our move and looking for advice.  

Hi Luca,

Are you and your fiancé joint owners in either property or do you both "own" one property? If you own everything together, you would be able to use the rentals as income when applying for a loan. Just a thought. I can reach out to my preferred lender and see if she has any further recommendations. I work from Sandwich to Orleans as an agent and I would be happy to meet up or chat sometime.

Best,

Mike 

Mike we are not joint owner on either. We each "own" our properties individually.  My 2 unit has a history of rental income, her 2 bedroom cape is where we currently reside and will be moving from and renting out.  

What should I be shopping for in new loans? Personal I assume since we will be living there at least initially.  Am I going to have a hard time doing that since I already have a personal loan on my 2 family unit?  Will I need to convert that to a commercial loan? I was assuming up to 4 personal loans ( 1 hers, 2 mine and 1 ours) wouldn't be an issue.  Is it??

Thanks for the info.  Let me know if you come up with any other thoughts.  

Originally posted by @Mike Fitzgibbons :

Hi Luca,

Are you and your fiancé joint owners in either property or do you both "own" one property? If you own everything together, you would be able to use the rentals as income when applying for a loan. Just a thought. I can reach out to my preferred lender and see if she has any further recommendations. I work from Sandwich to Orleans as an agent and I would be happy to meet up or chat sometime.

Best,

Mike 

 Joint ownership would only make it harder. Everything seperate they can do twice as much.  

@Luca Mastrangelo:  I would not call your mortgage's personal loans. The amount of loan's is not as important as the money you have available to pay the loans. How fast can you payoff the personal loan you have? This is where I would look to make myself look better for the next mortgage.

Originally posted by @Mark Holencik :
Originally posted by @Mike Fitzgibbons:

Hi Luca,

Are you and your fiancé joint owners in either property or do you both "own" one property? If you own everything together, you would be able to use the rentals as income when applying for a loan. Just a thought. I can reach out to my preferred lender and see if she has any further recommendations. I work from Sandwich to Orleans as an agent and I would be happy to meet up or chat sometime.

Best,

Mike 

 Joint ownership would only make it harder. Everything seperate they can do twice as much.  

@Luca Mastrangelo:  I would not call your mortgage's personal loans. The amount of loan's is not as important as the money you have available to pay the loans. How fast can you payoff the personal loan you have? This is where I would look to make myself look better for the next mortgage.

Mark you're correct. It's not a personal loan. It's a 15 year mortgage. I have 10 years left.  My girlfriends mortgage is a 30 year loan and has 25 years left on it. 

When you say say "amount of the loan's is not as important as the money you have available to pay off the loan's". Do you mean dollar amount or number of loans/mortgages?  Also what would be beneficial for available funds? I have capital in savings that would reduce the loan by half, but plan on using that for a down payment on my next purchase . 

Mark you are correct. No more foot in my mouth. I'll stick to the market and leave the finance to the professionals! 

Luca, I spoke to my lender and the best way is to leave things as they are right now. She said hopefully you are reporting rental income on your taxes and also that it is important to make sure that you are not reporting a loss on either property. If this is all true, since you are moving to the Cape and the property will be considered your primary residence, you would be able to put down as little as 5%. You may even be able to qualify for an FHA if the rental properties are at least 70 miles away. The guidelines for FHA are fairly strict so my lender was going to look further into it.

-Mike

Mike. Good info. Thanks. I'm reporting the rental income. Last year (2014) returns had less rental income compared to this year's pending taxes because it was owner occupied until June of this year. Since June 2015 it has been fully rented and revenue approximately doubled. No losses taken. Ive done some upgrades and will write those against my rental income but net positive for the year.  

Does my owner occupied affect the situation? This home was purchased with a FHA loan then refied 3-4 years ago into a 15 year fixed and is where it's currently at

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