All Forum Posts by: Chris Mason

 I've never seen or heard of a blanket loan as a way to game things to stay in Fannie world. Yes I would interpret as you have. 

If you had a property with sufficient equity to absorb the debt on 2 other properties, that could work.

Prop 1: loan $300k value $800k

Prop 2: loan $100k value $150k

Prop 3: loan $50k value $95k

$300 + $100 + $50 = $450 on an $800k property. Certainly doable, and now you just reduced from 3 financed properties to 1. For investors, the property with a crap ton of equity seems to often be the primary residence. So there's a risk factor here, because you can't walk away from your primary residence, let it foreclose, and still have a roof over your head... but you can with investment props. 

> Is it possible to do both, an equity line against a rental house and a FHA loan for a new rental property?

Yes, provided you don't want to have two FHA loans at once and provided that you intend to live in the FHA financed property for a year.

 Nah, I just meant "can you spot a bullshiester well?" because that's going to make a difference.

> Currently, we are looking for multifamily units in the Central Valley (Sacramento, Stockton, Modesto, etc) and there appear to be some rentals that cash flow nicely. Does anyone have any experience with this strategy in these areas?

From the financials I've seen of my clients, multi unit in modest income areas are indeed the winners in our area. Keep in mind that what I see isn't the results of 50% rules or 70% rules or any of that, but a combination of appraisal reports' operating income section and actual tax returns and actual lease agreements and the like.

> There seems to be quite a bit of podcasts and forum posts about folks buying multiple (even tens) of rental units a year. I have noticed that most of these folks are buying in the Midwest. Is this realistic for investors in California?

It depends in part on how your income from your day-job is. Once you've had a property for a few tax years, we look at your actual rent and actual expenses when we do our math to determine impact on DTI. If it's a recent purchase, we're forced to take market rent at 75% of value and then subtract PITI to determine how it impacts your DTI. Good day-job income can make up for this latter wonky calculation.

On top of that, there is of course the issue of you having the cash on hand for the subsequent down payments and PITI reserves.

Further, a lot of these folks that are in and out of deals uber fast are using a combination of cash and hard money financing. 

> Also, minimize tax write offs in the couple of years before you plan on buying if you are going the traditional bank route.

It actually depends on which write-offs. Some are good, because they can reduce your tax bill but your lender can "add it back" as income.

> One quote was for $4,200 and another for $3,475. The cheaper quote confirmed that his quote included the cost of the new meter (which is $1,000 by itself!), so I went with him. Ends up, he doesn't listen to anything I said about the meter situation and ends up pulling the wrong permit, which costs about $1,200 and [...]

I feel like it's pretty common for the cheapest service provider to be the least reliable.

 Why? I didn't mean it in a snarky or negative way...

If Yoda were here evaluating how strong the BS detection was with you, what would he say about it?

Mah fellow lenders, lend me your eyes.

@Jonathan J. Miller @Upen Patel

https://www.fanniemae.com/content/guide/selling/b2...

> If the mortgage is secured by a second home or an investment property, the borrower may own or be obligated on up to ten financed properties.

> These limitations apply to the total number of properties financed, not to the number of mortgages on the property.

5+ is commercial, not an area I know a lot about.

I know that it's sufficiently uglier that you don't see a lot of 5-10 unit properties because once you're in commercial world you may as well go all out and get 11+ unit properties. At least that seems to be what plays out, but again I'm not an expert on commercial.

> Just to clarify, a 2-4 unit property would still count as a single property?

Yup.

And another reminder that 5+ unit properties are not included in the count.