All Forum Posts by: Josiah Collins

@Wendy Van Camp You've probably already considered this, but I figure it's always worth double checking!  You mentioned this property you are selling was your primary residence before.  You didn't live in it for 2 of the past 5 years?

In many of the posts and blogs I've read here there is one thing that isn't super clear to me. I see how people mention that they will get a property under contract then look for a PML or HML. How is it that people are making offers without first having the money or a loan? Are they getting preapproved for a loan only? I ask because it seems like all of the posts I've seen say to attach a proof of funds or preapproval. I'm sorry if I'm just missing something super basic here! Thank you!

I'm looking at a deal where I would potentially be using a PML to fund a purchase.  The property I'm looking at is a foreclosure.  Since I would be using a PML, I think from the bank's point of view this would essentially be a cash transaction?  If so, what are some typical closing costs that would still come up?  I've always used a conventional loan prior to this and wanted to make sure I was accounting for the typical costs.  I was going to review this with my real estate agent as well, but BP has been super helpful and wanted to get input here too!  In a normal sale I think the seller pays for title insurance?  With a bank owned property do they still typically do that?  It would be in CA if that makes a difference.  Thank you!

That's actually what I would be doing. Would a HML tend to have the same restriction about a family member loaning me the down payment and the amount of time I had that money? Thanks!

I spoke with a loan officer that I worked with before and wanted to relay some additional information to see if that generates different advice. They told me that I should be able to do the normal 20% down, but since I don't have that amount and was planning to borrow that for a family member I would have to have that money in my account for two months before they could count that? Otherwise she said I could actually have that second person on the loan. However, I don't think that they would necessarily want to be on a loan. Is this a standard practice? How aren't people doing it when I see people talking about using a hard money loan or private lending for their down payment? Am I missing something? Thanks!

I could be wrong, but from my understanding of a 1031 exchange, there may be a way to make it qualify for a 1031. If you were to move out of that SFH and rent it out for a year it could then be considered an "investment property" and qualify for a 1031. The thing is you would have to live it in for at least a year, I think, as part of the FHA loan. Then have it rented for a year for it to reasonably be considered an investment. Not sure if that makes sense with your timeline, but I had a similar situation.

I thought those were part of the FHA loan program so wouldn't it need to be owner occupied to qualify for that?

Hello everyone! I'm still pretty new as a real estate investor and I had some basic finance questions. I'm also open to any and all advice! I currently own one rental and I'm looking to expand. I tried reading through a few pages of posts and couldn't find an answer to my situation. I've come across a pretty good foreclosure deal on a fourplex and the numbers look very good. Now I'm getting to the point where I'm trying to see if/how I might finance it. First, are there ever scenarios where a bank will finance a foreclosure with 20% down? The property has been vandalized but all of it is surface stuff. Mostly just need to replace drywall and paint, new carpet and some minor bathroom repairs. I'm concerned the appraisal wouldn't come in high enough though. The other part of this is if I had a private lender loan me the down payment, can I do that? Does that impact the likelihood of getting the main conventional loan? The idea would to BRRRR this property to pull out the down payment and some of the rehab costs. If I do a private loan, would that be an unsecured loan or is there a way after the property is purchased to tie it to this loan so they have extra security? Any and all advice is appreciated! Josiah Collins

Thank you Dave Foster that helped a lot! Definitely have a better understanding now!

Hi everyone! 

I've been reading through the 1031 exchange forum and I'm still a little confused as to how the actual numbers will work out.  I was hoping to give the actual numbers I'm working with to better understand this.

I have a property that I will be selling and just based on estimates I think it would sell for 510k.  The current loan is 328k.  After all fees etc etc, my agent gave me a sheet which shows me net profit would be 150k.

Is that 510k the most important number in a 1031 exchange?  If I found a property, or two, for a total of 500k would I likely be looking at paying taxes on 10k?

If I were trying to avoid financing roughly 25% of this new purchase, how do the numbers work if I bought a 400k property?  300k?

Thank you!