Is anyone apart of CCRA?

Question

I tried going to a CCRA (Clark County Rental Association) Meeting and now one was there.

Just wondering if anyone is apart of it and what do you think about it?

Kevin Romines · Answer

@Jim Costa Sorry for the delay in responding. Fannie Mae has a 10 financed property rule. This includes any residential real estate that you have a loan on. It is not a unit count rule, meaning that if you have a 4 plex financed it counts as 4, rather in that situation it counts as 1 financed unit.

So there are a few ways to legally get around the 10 financed property rule.

1). If you are married, each spouse can have 10 units in their own names, so as a married couple, you can have 20 financed properties.

2). There is no limit on the numbers of financed properties if you are buying a owner occupied property. So if you want additional rental properties, then go buy a new owner occupied home and make the previous owner occupied home a rental. You get a new home for you, and a new rental property. It might not be the right situation for everyone, but can be an effective tool to grow your portfolio.

3). The most advanced technique - If you have 10 financed properties and are capped out. Go open a Sub S Corp. Then transfer 1 or more properties to that Sub S and go refinance them with a commercial or portfolio loan with a local community bank or credit union. By taking out the loan in the Sub S name, even if you have to sign as a guarantor of that loan, it doesn't count as a financed property as far as Fannie Mae is concerned, because its a commercial loan. At that point, you just opened up 1 or more slots of Fannie Mae financing for new rentals to be bought.

I would plan to age out the ones that you have had financing on the longest or the lowest balances in relation to the value, to the commercial financing, as the terms are not as competitive as the Fannie Mae terms.

If you use this technique, you can finance hundreds of properties. If you buy the properties correctly, rentals tend to be debt neutral, or adding to your income or very close to it, when looking at them from a Fannie Mae loan prospective. So adding additional units really doesn't negatively impact a persons debt ratio, or if it does, its minor.

The actual Fannie Mae guideline is below: I hope this helps anyone decide to get into the rental game.

See below from the reference guide for FNMA multiple financed properties. If they own 25% or more of the LLC or partnership then it would count.

Type of Property Ownership to include in Financed Property Count:

 Joint ownership of residential real estate. (This is considered to be the same as total ownership of an individual property).

Note: Other properties owned or financed jointly by the borrower and co-borrower are only counted once.

 Joint or total ownership of a property that is held in the name of a corporation or S-corporation, even if the borrower is the owner

of the corporation; however, the financing is in the name of the borrower.

 Obligation on a mortgage debt for a residential property (regardless of whether or not the borrower is an owner of the property).

 Ownership of property that is held in the name of a limited liability company (LLC) or partnership where the borrower(s) have

an individual or combined ownership in the LLC or partnership of 25% or more, regardless of the entity (or borrower) that is the

obligor on the mortgage.

 Ownership of a property that is held in the name of an LLC or partnership where the borrower(s) have an individual or combined

ownership in the LLC or partnership of less than 25% and the financing is in the name of the borrower.

 Ownership of a manufactured home and the land on which it is situated that is titled as real property

Type of Property Ownership NOT to include in Financed Property Count:

 Ownership of commercial real estate.

 Ownership of a multifamily property consisting of more than four dwelling units.

 Joint or total ownership of a property that is held in the name of a corporation or S-corporation, even if the borrower is the owner of the corporation and the financing is in the name of the corporation or S-corporation.

 Ownership in a timeshare.

 Ownership of a vacant (residential) lot.

 Ownership of a property that is held in the name of an LLC or partnership where the borrower(s) have an individual or combined

ownership in the LLC or partnership of less than 25% and the financing is in the name of the LLC or partnership.

 Ownership of a manufactured home on a leasehold estate not titled as real property (chattel lien on the home).

Kevin Romines · Answer

@Jim Costa I have  a solution to the Fannie Mae 10 financed property rule. If followed, you can have many any more then 10 financed properties and Fannie Mae will gladly give you the loans.

Jim Costa · Answer

@Kevin R. Please explain for all to learn.

Laura Lindeman · Answer

hi Austin  I am a member of CCRA. What would you like to know?

Jim Costa · Answer

Hi @Austin YoumansI live in Washougal.  New to BP and loving it.  Finding new areas all the time.  Just discovered this section.  I am primary buy and hold SFR-4unit.  I just bought 2 duplexes last month and closing on another 3.  I will need to take a look at my portfolio and readjust because I am maxing out on fannie mae guidelines for loans.  A also hope to get into larger apartment complex.

Tom Mendez · Answer

I'd like to know your plans Austin. I have a few small targeted areas just outside of Vancouver.

TM

Is anyone apart of CCRA?

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