All Forum Posts by: Briette Awbrey

great idea @Theresa Harris... I'll add that to my list of questions to ask the builder.

@Dave Foster, wow.... that's genius. I just wonder how much more rent you can get for the model units to the general public. I assume the model homes are significantly more expensive then their lower grade homes. But this is something for me to ask the builders tomorrow. Thank you!

Thank you for your insight! I just made appointments to talk to builders tomorrow. Are there certain overlooked builder upgrades you'd actually pay for / upgrades to avoid? 

I'm currently selling my primary residence (that I bought in 2011). So I'll be making a nice chunk of change & need to invest a portion of it into rentals. 

Would you recommend buying new builds if my plan is to hang on to them long term? My mentality is that there will be less cap improvements / maintenance (hopefully) + there's no inventory in our market currently.

2nd part question - Do builders have an issue with purchasing as an investor rather than primary residence?

FYI: This isn't my first rental property, I've owned multiple. Also, "long term" would mean 15+ years (sell when my toddler graduates HS).

Let me know your thoughts!

Finance (and tax) wise, is it better to pay off my rental property within a year OR buy a new rental property within a year?

Things to consider (if they matter at all):

I just inherited $100,000.

I have a very young family & childcare is essentially a mortgage payment. So, income is important for the next 4 years.

I have another rental property that is fully paid off so I will net about $1,600/mo on it once I move out next month.

Below are the scenarios:

CURRENT RENTAL PROPERTY

Owe: $158,000

Interest Rate: 4.375%

Monthly Mortgage: $1,070 [$578 goes to interest, $323 to principal, $169 to escrow]

Monthly Rent: $1,650

Cash Flow +$510/mo

I can pay this off in under a year.

-OR-

BUY NEW RENTAL PROPERTY

Prices are high in my area so I may need to only focus on a condos for less renovation.

Purchase price, max $225,000, likely around $125/mo HOA

20% down @ 4.75% rate OR 25% down @ 3.625% rate – so I’ll go w/ the 25% down

Mortgage payment ~$1,025/mo

Down payment $63,000

Rental Income ~$1,300/mo

Likely I’ll make less than $300/mo

To me… paying off my rental property makes the most sense. But the majority of online advice I am seeing is to purchase another property.

Any advice is greatly appreciated!

@Nicole Heasley Beitenman - I second that question. How would the bank even know that the property was converted into a LLC if the payments are being made? I wonder what would prompt them to check or if they even care who is sending in the payments (since it would be from a LLC bank account).

@Ralph Poirier - I did refi a couple years ago. I think the problem I'd have is that if I refi again and get Fannie Mae as a servicer again (because I have no control over who buys the loan) then I'll be in the same situation? Not sure.

Dang. That's not good news. Thank you for the reply.

Hi everyone,

I called Wells Fargo, who services my loan & they said that the investor (Fannie Mae) won't let me transfer my house into a LLC. It was originally bought as a primary residence in 2013 but has since been a rental property for years.

When I spoke to Wells Fargo they told me that because I bought before 2016 that Fannie Mae won't allow it to be converted into a LLC - they even went to far as to mail me a follow up letter confirming this in writing (attached).

I spoke to my lender & she said "I'm not sure how they can direct how you take title post close but their letter says that the servicer of the loan doesn't allow that. Perhaps to them putting it in LLC means turning home into income generating property (when loan is taken in primary residence form) Intentions of occupancy shift all the time though."

I didn't think it would be an issue so I have already set up the LLC but HAVE NOT changed title to the LLC. I was hoping some of you could give me your insight on this... Do you think this letter is just a threat? I really need to put this investment into an LLC & don't understand why they are telling me I can't.

Thanks so much & Happy New Year ;)

Briette