All Forum Posts by: Debra R.

@Account Closed

I spent a lot of time talking to one mortgage broker.  She couldn't find a way around me not currently having an income.  Spoke to 3 or 4 others on the phone and they all said some variation of:

won't loan to an LLC

have to have 2 yr income history for me, 

or have to have 2 year income history for the east bay property that shows cash flow 

or won't base the loan on owner occupied property ( referring to the east bay property)

@Account Closed

I'm looking for a loan to purchase a new home to live in and then rent or sell at the end of 2 years.  Since I own the 4 plex outright I  thought it might be possible to use it as collateral?  

Hi BP Pros!

I’m having trouble identifying a loan that I won’t immediately be disqualified for.There is a confusing number of loan options and I have a few disqualifications for many (all?) conventional loans.Below I’ve laid out my scenario as brief as possible while including all the details.If you know of a loan that I wouldn’t be immediately disqualified for, let me know.I’m trying to narrow down what type of loan to apply for and with who so I don’t continue to stumble blindly and waste time.

The details:

Assets:

I own 4 units in the SF east bay area with no mortgage. For the last 3 years (since I bought it) I have been renting 2 units and using the other 2 for myself and my daughter.For the last 3 yrs I have not made a profit, but have broken even.The price of rents has skyrocketed here and I’d like to take advantage of that.If I rent out all 4 units I can gross about $8,000 a month and net about 4,500.

I also have more liquid assets but prefer not to sell them off if I don’t have to.

My credit score is very good –750+.

Plan:

My plan is to move about 2 hours away where housing is significantly less expensive, move into a single family fixer, rehab it over 2 years and then sell it or rent it depending on what the market is like. I’m looking for a property that is under $250,000, in a neighborhood that I feel fairly safe in. I can put up to 40% down.

I do my own property management and nearly all my own rehab.

Disqualifications I’m running into:

I don’t have a 2 yr income history, and having been a stay at home Mom, I don’t have the skills that jobs are looking for today.Currently I live off savings.By moving I can support myself with the $4,000 + per month off the 4 rental units.

The 4 units are held as an LLC and haven't shown a profit in the last 3 years.

Long range plan – To move out of the east bay, rent all 4 units, get a good cash flow for 2 yrs, dissolve the LLC and put the 4 units into my name, and at the end of 2 years I'll have a 2 yr income history and be in a much better position to get loans to buy and hold more rental property.My plan is to have enough rental properties to support myself and to put some money away for retirement.

I realize that with any loan I’ll pay a higher rate than someone with a 2 yr income history but I want to exhaust all my options for less expensive loans before I consider higher interest loans.

Just this morning I found on BP that I may be able to apply for some VA loans since I have a blood relative that's a veteran.I'll be researching that today but am not getting my hopes up that it will be easy or even possible.

Since I had such a hard time being brief, I’ll reiterate my question: Are there any loans/loan companies that you know of that wouldn’t immediately disqualify me?

Thank you in advance to everyone who took the time to read this and especially to those that are able to reply.

Debra

Is the family member option only available with Navy Federal?  Or also with the other organizations we're talking about in this thread?   

Debra

I have a vacancy and wanted to use mysmartmove to help with screening.  Everytime I try to go to their site I get this msg -

This Connection is Untrusted... blah blah ....

this site's identity can't be verified.

Anyone else getting this?  

Hi J., 

Thanks for the info on owner occupieds in Oakland.  Even if I was comfortable living in West Oakland, it would be hard for me to move.  We really love Alameda.  

About banked rents, are you saying that a seller can transfer banked rents to a buyer? 

Last thing - are you the J. that arranges Bay Area meetings of BP members?  I just missed the one last month, but would like to attend one.  

Debra

Sorry for such a very late reply.  I do very much appreciate everyone's answers. 

@Ben Leybovich - yes, as a newbie I do forget that there are reasons other than rental income to buy rental properties.  

@Wendell De Guzman - Glad to hear that it's probably at least in part due to a bubble and not a big opportunity I'm missing out on.  

@Steve Olafson- I probably over estimated insurance costs but even with less insurance it still wouldn't be making good money.  

@Leo B. - 40K to move out!  Wow!   That just boggles my mind.   But then when I first moved to CA I thought $250,000 was a very high price for a SF house.  Now $250 feels like a steal, so sometimes it just takes a bit of time to mentally adjust to market rates.  

If you look for an association of boarding kennels you'll find a lot of experience in what works best for facilities that house animals.  There was the ABKA (american boarding kennels association) but they have dissolved.  There are likely others.  

I would look for products that are very water resistant - including the trim.  All the animal facilities I know use either a hose or a pressure washer to clean up after the dogs.  If you're only doing cats then it's much easier to clean up.  

As for the pee smell, start with a bleach water solution that will usually kill the smell.  And it has an added disinfectant benefit.  

Take a look at these websites to see photos of their set ups.  

http://happyhound.com/

http://www.citizencanine.net/about-us/

https://www.eastbayspca.org/

I have some experience with boarding kennels/animal shelters and lots of experience with rescue dogs.  Feel free to contact me with any questions.  

I'm with Bryan.  If it can be hidden with trim- hide it.  :)

I looked at this property a couple months ago.  

https://www.redfin.com/CA/Oakland/1124-16th-St-946...

There's nothing special about it.  Not a good neighborhood, not a good school district, needs a lot of work structural, electrical and cosmetic.  There's nothing charming about the apartments.  In addition, it is under rent control and just cause for eviction.  It comes with 2 tenants.  The buyer won't be able to raise the rent on them more than the city dictates (which is historically around 2%/yr) and can't easily get rid of them.  

I did a BP analysis on this property and underestimated expenses.  I still couldn't get it to even break even.  Yet, the property had enough offers on it that it sold over asking.  

What am I missing?  Is this market so hot that people are making ridiculous decisions? Or is there some method of making money here that I don't know about?