All Forum Posts by: Mark F.

@Andy Collins

I feel your pain Andy! If we lived near each other, I'd suggest getting a beer and drowning our sorrows together :).  

In the last 12 months it's been a roof, a dishwasher, a tree removal, pest removal, and two partial AC/furnace unit replacements. We also had a small water leak that required a pipe repair and some sheet rock being replaced. That's in addition to the usual maintenance stuff. Lot's of money flowing out, but at least we're getting good cash flow and the property is paying for it. 

@Michael Smith

Wow, you're not messing around ;).  Good stuff!

@Robert Marek

I would definitely look into hiring a management company. I'm guessing your dad has been growing weary of managing for a while, so it's possible he's let some maintenance slip or hasn't kept units rented for top dollar as well as they could be. Adding a quality management company might more than compensate for the added cost because their full time job is to keep the place maintained and rented for top dollar. I would get some referrals for good management companies from other investors and call them and let them know your situation and see what they can do before making a decision to sell. You might be pleasantly surprised. 

@Dennis Standers

FHA won't allow the seller to finance the down. Gift funds are allowed, but they have to be from somebody that doesn't have a direct financial interest in the transaction. For more on gift funds, check out the following link (no affiliation):

http://themortgagereports.com/2669/downpayment-gif...

@Peter Radonich

Assuming you're seeking a standard investment property mortgage with a traditional bank (as opposed to commercial, which I'm not an expert in), adding other people on to a loan application is possible, but it's not always easy. The lender will want credit, income, and assets for everybody on the loan application, which can create a paperwork nightmare. 

The lender will also price the loan to the lowest credit scores of all applicants, which means you may get a less favorable deal than if the application had just the most creditworthy borrower on it. 

In today's lending world, it's better to keep things simple if you can. If you can go with less people on the application, it will be easier to get the loan done. 

@Shawn-Karisa Shaffer

Yes, unfortunately, what you've experienced is the reality of having rental real estate or being self-employed. Because you write off so much stuff, your taxable income is lower - which is a great thing from a taxation standpoint. However, mortgage underwriters more or less use your net taxable income (excepting depreciation and a few other things) to qualify you for a mortgage. 

I remember having to turn down a mortgage application for a doctor in Los Angeles who owned a thriving practice, had tons of assets, tons of home equity, good credit, and a small mortgage balance. He was the perfect borrower, but because he wrote off so much, he didn't show a whole lot of net income and I couldn't get him qualified. Completely ridiculous, but it's the reality of things today. 

Agreed, and to clarify, the 4 or 10-loan Fannie limitation only applies if you're seeking a Fannie Mae loan for one of your investment properties. If you're financing with a portfolio lender, they won't necessarily care how many financed investment properties you have. 

"Agency" financing is just another name for Fannie Mae financing. In other words, agency loans conform to the standard Fannie Mae guidelines, which have the 4-property limitation you're running into. You want to find somebody that does non-agency portfolio financing because they will underwrite to their own non-Fannie Mae guidelines. 

Unless you want to fly out there to show the property every time it's vacant or needs repairs, you definitely want to have a property manager. Yes, it's an added expense, but a good property manager is definitely well worth the money. 

We invest remotely with a property manager and it's worked out great, you just need to make sure you're working with a good PM. There are a million awful property managers out there for every good one, so look carefully. There's tons of great info on the forums about how to vet PMs. 

It means the homeowner got sued and lost and now there's essentially a lien against their property (often called a "cloud" on title). If they sell or refinance, that lien has to be paid off for clear title to be issued.