All Forum Posts by: Eric Johnson

Right, but do you know the effective tax rates of properties in those areas? Outside of cook county is wildy in-proportionate because there aren't any businesses/large commercial districts to help subsidize the property tax rates and so, all of the burden falls on people who live there. The effective tax rate is Lisle is about 7.8667 per $100.

Meaning you're paying about 7,800 a year in property taxes fro a $100,000 property. Good luck finding a deal that works down there.

I hope these are words of encouragement. Real estate is a sophisticated topic that takes years of practice to actually understand. Keep learning.

My dude... just find someone to shadow and help. Just learn the trade first. You'd be making a grave mistake going in on your own deals. For example, the numbers you threw in your post don't make any sense and there's no information there that actually tells us anything important about what you want to invest in. I'm not saying this in a derogatory way, I'm saying it because it's the reality. If you turn 18 and start doing your deals without the proper preparation and support, you will fail and the market doesn't care.

If you're 14, the best you can do is to link up with someone and shadow them.

Josh, if you want to buy a 3-unit and you have a w-2 job, a good estimate would be total number of units in the building - 1 x .75

They take off a unit, in case you live there (even if you say you're not) and then a 25% contingency for market rent variance. 

unit 1,2,3 = 800/mo 

so, 3-1 = 2 = 1600/mo x .75 = $1,200

This is a common FHA calculation. However, FHA also has the self-sufficiency test, which means the net numbers above, must cover the mortgage payment by itself, even if you are qualifying with your own income.

They do not play around with qualifications and guidelines. If you are going standard fnma/fhmlc then you want to ask your local lender and explain to them exactly what you want to do. It's not as simple as, okay the property makes $5,000 per year, here ya go. 

good luck 

If you're trying to go conventional, the only way then is to contact local banks who has portfolio lending programs for investor occupancy properties. Time to hit google maps and dialing some #'s.

GL

The only way to know for sure is contact your title/settlement agent for your new acquisition and your refi. Make sure you tell them exactly what you want to happen, don't assume people know what you're thinking. Once you make the ask, they'll let you know for sure if it's doable or not.

If it is, feel free to ask execution based questions (ie how will this actually work and is there anything I need to do to make sure it can work). 

Never assume anything in real-estate, that's where you run in to a lot of issues because then people start telling you, you cannot do 'x' thing because of some missed details. 

Good luck my dude

If the lender were to seize the property, they would have no interest in raw dirt & it would sit on their books for probably quite awhile. 

Even if you're talking prime land in a major city, it's still just dirt. A lot of credit unions finance land, but that's assuming you are then building a home on it or doing some other construction. 

There's no harm in calling local credit unions and asking them. That's the only way to know for sure.

Amedeo, I do these loans all the time. 

Usually capped at 60% LTV. Rate is gonna be around 6.00-6.25% paying about 2.50% origination (depending on the deal).

Term can be structured to 5/1, 7/1, or 10/1 hybrid arm, either fully amortizing or interest only. 30 year fixed is also an option.

Properties need to meet a 1.20x debt service requirement (gross rent income/pitia), no personal income requirements, close in an LLC. Foreign nationals usually schedule an appt at a US embassy and close there, since the notaries at embassies have international jurisdiction.

Good luck.

Mike, the only way you can use this income to supplement is having two years history of profits on your tax returns.

This is why full time investors hate conventional financing. Because 

1. It takes too long, two years is a too long, you can get more done in that timeframe AND 

2. you forced to take a profit and pay taxes on your capital gains, and from flipping you will be paying more since it's short term capital gains

I would talk to a lender in your area first, go right to the source. It is too hard for BP to offer exact advice for personal situations such as these. 

good luck my dude. 

Josh, you won't find non recourse for deals like this, and why does it even matter? There's not really a reason you need it for these deals.

Alex,

It depends on the deals you're trying to do. If I had more info, I can get give you some honest advice.