All Forum Posts by: Chris Mason

Nah. If you can show that you had orders dated after the deal closed, no one can question that you intended to live there for at least a year.

You don't have control over when you get ordered to crazy places far away from Ft Knox.

(also @erick berthaldan)

Random thought of the moment:

If Hooman Freaking Sultanpour is ever your assigned appraiser, start flipping out right away, say he was sexist/racist/whatever against you (or the realtor), and demand a new appraiser ASAP.

Unless of course you want to use the low appraisal to negotiate the price down. In which case he is excellent for your goals. :)

> Most of parts of California will give you a negative cash flow.

I'm going to have to disagree with you. Plenty of folks I work with have cash flow positive empires spread throughout the bay area. Potential owner occupants not being able to afford the down payments means they can't purchase and thus stay tenants, driving rents up faster than sales prices in several cities.

I've got one dude that's been living in a rent-controlled apartment in SF for 15 years that has a half dozen rental properties throughout the east bay in cities that do not have rent control, that are all cash flow positive. (Evil Genius status on that rent control v no rent control setup is like 7 out of 10)

He just purchased a 3 unit in Vallejo. 

Right, sorry, I misread.

So I was fortunate enough not to have any student loan debt, and I've never really had anyone motivated/intelligent/resourceful enough to actually drill down on this question in regards to their student loan debt:

Can you take your student loan debt out of deferment, and then put it back in, when you please, and if so how?

The basic idea being to calculate your DTI ahead of time to make sure it'll work, take it out of deferment, close on the mortgage, and put that student loan debt right back into deferment.

(Or voluntarily just take it out of deferment and leave it there, so we can avoid Fannie's stupid way of calculating deferred student loan debt...)

> because of my student loans, my DTI is too high.

and

> my lender told me that the rule has changed and the deferment no longer prevents me from being hit with the debt.

I'm confused, @Account Closed.

50% rule has always seemed reasonable to me as a first cut.

You as his realtor should be doing a normal CMA for him, and a rent CMA for properties, as well as asking for what the units currently rent for when you ask for the seller disclosures. You also need to know about rent control laws in the areas you're checking out for him.

You want this property to be a huge money making success for your client, because then he will get the "Real Estate Bug" and come back to you to purchase future homes. This isn't one where you think of selling a home, this is one where you think of setting your client up for as much financial success as possible and truly adding value to his life. That very well might mean you tell him "bad idea" on the first 3 homes he wants to write offers for $X on - tell him to either not write the offer, or to write the offer for much less than his $X. These investor types are huge freaking money makers for you, **if you help them make money** in turn. 

For owner occupied FTHBs, you nudge your clients to make higher, more 'serious' offers. For these guys, it would be OK if you wore your wrist out from making so many vaguely lowball just to see if any stick. Don't get stupid with it, but find the balance.

Investors are about 5x as much work for you per closed transaction, if you're doing it right. But they pay better in the long run, so this is opportunity knocking. 

You aren't selling a home, you're playing kingmaker and setting your client up for an empire.

Are your student loans in forbearance or deferred? 

Everyone loves the cloud and their spreadsheets...

EtherCalc - https://ethercalc.net/

 Bingo, our winner. The Fannie cap is 10 financed residential properties total, regardless of the number of loans, and including private notes that will show up in county records (even if they aren't on your credit report).

The way you game this if there are two spouses earning income is to split them up among themselves so that each individual spouse has <10 financed properties as "...a married woman, as her sole and separate property" and with only one spouse on each loan.

Another way you game it is by having fewer properties with multiple notes. If you're at 10, find a private investor (or portfolio lender) that will give you a 2nd on one of them large enough to pay off any/all liens on another, and now you're down to 9.

Way #3 to game it is to mix in some financed commercial real estate and/or 5+ unit properties. Does not count towards your total.

The discontinuities where things get harder are: 4 financed properties, 6 financed properties, and then 10.

When I looked into it, it was actually correspondent lending for... I think B of A and one other big one. No explicit gov't involvement. Then I discovered that NACA likes to sue banks for social justice type reasons - "This Latino with a 590 FICO score had a higher rate than that Asian woman with an 800 FICO, ergo you are racist" type things.

Put two and two together, and it looked to me like maybe these big banks working with them are doing it from a "if we do these crappy portfolio loans that are x% more likely to result in foreclosure, will you not sue us?" perspective.

Anywho:

I've done two deals in the last year or so where folks spent months and months messing around with NACA just to get ready to house hunt, got sick of it, walked in my door, preapproved next day, in contract soon after.

I can't speak to what they DID do, only to what they did NOT do... which was get those well qualified homebuyers out there to buy homes.

That being said: if a homebuyer is eight months away from being ready and has time to blow... go for it, see if you like the smell of what they're cooking.