All Forum Posts by: Doug Smith

What business structure is your gas station in (LLC, S-Corp, etc)? Do you file a separate return for that entity or does it flow through to your Schedule C. The E will tell you 2 things...it covers rental property and what entities flow through to your tax return. The latter is really none of their business, but it sounds as if they think you are renting out the property to another entity. Do you have an entity that owns the property and another that owns the gas station business itself? Does the station rent from you or another entity that you might own. There are a myriad of reasons that they might ask for it, but I would need to know more to answer your question correctly.

We do a ton of ground-up spec construction. Usually, borrowers purchase the lot first and we usually lend to 80% of cost up to 70% of the as-completed value. Most lenders are going to want to see that you've done something like this before. The one thing that I do see on here that would give me pause is that, although I love NC, I absolutely despise doing business in NY. The laws there are NOT friendly to lending. Why are the lenders telling you they will struggling financing you? 

I'm in the Tampa Bay area as well. If you're going to remediate a sink hole, you should remediate it right. I'm not sure if you recall the sink hole in Seffner (East of Tampa) where a sink hole swallowed a guy in bed. You can certainly shop the repair, but make sure you get the engineering paperwork. This is not going to be cheap. Does your homeowner's insurance include sink hole coverage?

I've always done it this way - if you have another job, how much do you make an hour? How long would it take out of your day to paint? If your hourly salary X hours to do the job = more than what it would cost to hire a pro...then hire the pro. Spend those hours working and pocket the difference. If you make less and if you can pull it off, then be a weekend warrior. Good luck. 

I just answed another similar post. I would rethink actually transferring the deed to a buyer if you are still on the hook for the note. I tried to look at your profile to see what State you're in at it will make a difference, but I couldn't tell. You'll either have to have your attorney go through a process (deed theory state) or the court system (lien theory state) to get the property back if they don't pay, but you'll still have to make the payments to your lender. Plus, @Chris Seveney mentioned that a lender might take issue with the transfer, which is usually their right (see the bajillion posts on "due on sale" on here). Instead, think about keeping the deed in your name with a contract for deed. Your real estate attorney can assist in drafting it, but the buyer can pay the taxes and insurance and have rights to the property, but if they don't pay, it will make it easier to recoup the collateral. You can still do something like you suggest, but maintain more control. I wish you well. 

Hi @Lily B.. I implore you to rethink selling a home sub-to. Basically, you're signing the property over to another party and keeping the loan in your name. You're trusting someone else to pay it. I know this is all the rage, but the main guru that touts sub-to didn't get into the real estate field until 2011, so he's never been through a crash to see how, every downturn, sub-tos blow up (they do...I've been through several downturns and watched it happen). Instead, consider a contract for deed or some other vehicle that will allow you to keep control of the property if you want to seller-finance it. Please, please, please don't sign your property over to someone else and trust that they'll make your payments. For the Seller, when sub-to goes bad it goes really, really bad while the buyer can just walk away leaving you with a delinquent note, a legal fight to get the property back (remember, you're in a lien theory state, so you'll have to go through the court system), and the property might not still be in the condition it was when you sold it. I wish you well in your sale. If you have questions, I'm happy to chat. 

Most lenders, including us, will do the lesser of the purchase price ($1.095M here) or the appraised value as the amount used to calculate the LTV. After 6-12 months, depending upon the program, you can refinance it if you wish and use the appraised value. Most institutional lenders are going to look a it like that. Also, lenders typically don't like to see borrowed down payment funds.

You'll have an LTV hit for Cash-Out, so you'll likely max at 80%. The trick is going to be getting the DCRR ( Appraisal 1007 Income / (PITI + HOA)) at or above a 1.0X. It's all going to boil down to cash flow.

First time poster with a 100% LTV deal below a lender's cost of funds for a Fannie/Freddie deal. Sounds legit to me. Where do I send my application fee?

Hi Alana, I'm afraid that will either be through a local bank or a local private person looking to lend personal money. Intitutional people like us are going to struggle with a $50K loan. We're just not set up for it. In addition, if you pull $50K out of that property, you'll be sitting at 90% LTV. That's pretty high for an investment property in this environment. I am not wanting to say you can't do it, I simply think it's going to look more like a term/installment loan from a local bank or a private individual.