All Forum Posts by: Jeff Brower

I am currently in contract on a hud home. I believe they review the investor bids on a daily basis IE every 24 hour period. So long as your offer is the highest within the first 24 hour of the investor period it should hold up. 

As an investor, once you submit your ernest money, do not expect to get it back. The contingency period of 15 days is good for owner occupants only. Any inspections that you do prior to closing will be FYI only. If your offer is accepted you must work quick to get the contract to their office within 48 hours. It must be original black ink, no copies, faxing, or scanning... There should be attachments on the hud website with the hud provided 'appraisal'. This should give you a general idea of the condition. Although they list it as an appraisal, they no longer provide a price. It is more like an inspection. Take that inspection with a grain of salt and always assume the worst. Good luck and let us know how it goes!

Many chain banks (chase, BOA, etc) do not allow loans under a certain amount. Check out small local banks and credit unions that keep their loans in house. I just obtained a loan for a 43k purchase (36k loan 15% down) from a local credit union. These would be your best bet if looking at properties under 50k.

Many people will suggest to skip the LLC process and just get an umbrella insurance policy until you hit a certain number of rentals. This is the route that I am taking as I am in contract right now to purchase my first one. I would search the site for "Due on sale clause" and you will find a lot of information regarding LLCs and transferring titles post-purchase.

From a future DTI standpoint I don't believe that you can use the income generated (by roommates) in order to reduce your ratio, even if you have two years of tax history. I remember reading this somewhere on BP. Do a search and im sure you can find some more info.

Go for it Andrew. A high percentage of posts in 'what would you do if you started over' threads that I have read on BP have been about starting with an FHA loan on a 2-4 unit. I actually considered selling my personal single family in order to get back to this point, but am living in a home that too well suits me for now. Head over to the multi family forums and spend a few hours going through the archives and you will answer many of your questions.

I had planned on being on the erie islands (PIB) from Thursday until Monday with the boat but this may be cause for me to cut it a day short. I am tentative at the moment, sorry I cannot 100% commit yet but will let you know asap.

@Jesse T.

hit the nail on the head. I am in the same situation currently. I bought my home in August of 2012 and gained equity instantly as I bought an estate sale. I purchased with an FHA at 3.5% down. Even though I have more than 20% equity I must wait 5 years until the PMI can be dropped off. They use the purchase price for the valuation, not the current value. So say your friend purchased for 100k and the home is currently valued at 130k; his remaining loan amount must hit 80k and must be 5 years old before he can get the PMI dropped.

Now this doesn't apply to fha mortgages obtained after June 2013 as rules changed and PMI must now be carried for the life of the loan. The only way to get out of PMI in that case is a re-finance.

10 is the number that is allowed by fannie mae. If your lender told you 4 then that is an individual institution overlay. Many big name banks have these additional overlays on top of the fannie requirements. Smaller local banks and credit unions are where you want to look.

@Amber Stevens

I am relatively new on here as well but wanted to say welcome as well. I live in lake county (Eastlake) and have had my realtor show me several currently active listings throughout Willoughby, Willowick, and Wickliffe. It is a great area that is far enough east to escape the negatives of east Cleveland. I have primarily looked at listings sub-75k but if I can help in any way with your research let me know!

Ill second what Shaun said, though it really depends on the lending institution. A credit union that I recently started using needs only two years of landlord experience, not two years for each property. After two years of landlord experience documented on your 1040 if you want to use additional properties that you own towards lowering your DTI you have to present a signed lease *AND* a cancelled check from the renters to show proof. With those they will use 75% of the projected rent towards your income.