All Forum Posts by: Craig Jeppesen

I use Lowe’s Arcadia cabinets, but don’t do $300k flips. In my area you can build a new home for $325k. My last flip sold for $174k. If I was doing a $300k flip here I would go custom. I am sure in some areas $300k is cheap and you can get away with in stock cabinets.

Use your $434 and add back vacancy and maintenance reserves. Those won’t hit your tax return.

What you are asking is more important for the dti calculation not for interest rates. Your interest rate is determined by the market rate, your credit score, and down pmt amount. Dti is a calculation where the bank will compare your monthly payments compared to your monthly income and if the ratio is below a certain percent (usually around 42%) you qualify for the loan. They take 2 years of tax returns to calculate the income side of the ratio. If you have more debt you might need to wait. If you have low debt payments your current taxes might suffice.

The problem is banks just don’t look at your rental. They are not calculating dti on each property. It is one ratio and it includes all of your monthly debt payments like your personal mortgage and min credit card pmts. Here is an example of how it would be calculated:

Dti takes the total of all your monthly debt pmts divided your total monthly income. For your rental piece the bank will include your PITI on the monthly pmt part (numerator) and will use your tax return for the income piece usually taking your taxable income and backing off depreciation and sometimes other non cash items like mileage you deducted. The document you provided will not be used normally.

This is going to be a tough lesson to learn, but you will learn a lot from this experience. Unfortunately it is going to cost a lot of money. Hard money is for flips and brrr projects only, rehabs happen between tenants, tenants don’t always do what they say, etc. I think you will learn to plan more after this is over. Good luck!

Don’t time the market, invest as much and as often as you can. Remember that investing is for the long term. It is possible that you lose money (unrealized) the day after you buy but you buy because you believe that in 10 years it will be worth a lot more and pays you income via dividends or cash flow from a rental. The best way to prepare for a downturn is to have plenty of reserves and several exit plans.

No that is not how it works. You avoid the 10% early withdrawal penalty on up to $10k. It is still included in your Taxable income and can easily bump you up to a higher tax bracket and be very expensive. This is usually very expensive and I wouldn’t recommend it.

I use IDAHO Central Credit Union for everything and also have worked there for 17 years. Let me know if you have any questions. Also, I know all the mortgage loan officers in BOISE and they all do a fantastic job and know their stuff.

Just know the risks. I have used 401k loans before but for short term financing. I don’t think I would do one for a long term down pmt. if using for a brrr property, it is a great source of funds.