All Forum Posts by: Laura Williams

I have a friend who had good luck with using an ozone machine

@Brian T. Grooms You're very welcome :) If you do finance with a bank that isn't familiar with real estate investors,  I've always had to tell them to adjust my income for the loan application….as you know we get the phantom depreciation on real estate income which makes our income appear lower than it really is. But the bank should adjust that when considering your actual qualifying income and add back the depreciation. So if most of your income is from investments it might be higher than you think. I'm self employed too and it hasn't been too much of a problem. Mostly just a pain to explain it and a bunch of paperwork. The banks usually ask for 2-3 years of income and then average it to determine the yearly income. 

Good luck with everything and keep us posted :) 

@Brian T. Grooms From what I understand (I'm not an expert) you have a couple of choices. You can cash out refinance on a traditional bank mortgage where you can get a 15 or 30 year fixed rate loan. This will be the best and lowest interest rate but there are certain qualifications you have to meet with income/reserves etc.  From what a banker told me after you have 4 loans you can no longer get a cash out refinance traditional mortgage. Some fannie mae/freddie mac rule. You are allowed up to 10 traditional loans but after 4 they can't be cash out refinance. So just something to keep in mind. 

Your second choice would be to refinance with a commercial or portfolio lender where they hold their own loans and usually less strict with the rules. The down side is the interest rates are slightly higher and usually a 5 year ballon payment but you are suppose to be able to get the loan renewed at that point. Monthly payments can be higher cause they usually don't amortize them over 30 years….it's usually 10-15 years. But probably easier paperwork and lighter requirements.

Third option could be a lender like Bob Green from the THG Capital Fund …he's a member of Bigger Pockets and is an asset based lender. I haven't used him before only talked to him on the phone.  His rates are competitive and he will work with a lower Fico Score and doesn't require tax returns. I think his requirement is that the property has to appraise for a certain amount and he does loans though out the US.  I don't want to misquote anything so best if you ask him directly about specific requirements.  

If I were you I wouldn't do a HELOC. I would try to do a 30 year low interest fixed rate refinance mortgage first and if you don't quality for that then try a Portfolio lender or someone like Bob Green….depending on your financial situation. All lenders are going to require that you have some equity in the deal so you're probably looking at 60-80% loan to value.

@Justin Hall welcome to BP !! I am also an out of state investor & have a couple of rental properties in KC. I have worked with @William Robison  doing big rehabs & property management on 2 properties there. I have been very happy with his services & would definitely recommend him for anyone looking to invest in the Kansas City market. 

Just another opinion but If it was mine I would hold onto it & rent it out. If you really needed the 40K equity you could always refinance. Also your cashflow would be almost tax free as you get phantom depreciation on real estate income.  And at this rental price point and in a good school district there's a good chance you'll be able to find a quality long term renter. 

I use Scott Gutterson. He is based in NYC and he's both an accountant and lawyer. He is very good and very smart. He was referred to me by a managing director at a big investment bank. I don't think he specifically specializes in real estate but he seems to know everything tax related. 

I'm not an expert on this but I believe you can as long as the Heloc will have the first and only mortgage which sounds like the case with you. I was just talking on the phone today to some banks asking this similar question and that's what they told me. The difference is my properties are co-ops which are a huge pain to get mortgages on compared to normal property. So I'm sure if they said I could get then would think for sure you could. The bank who said yes to me was Santander Bank and they said I could potentially get an 80% loan to value Heloc on a second property co-op and currently interest rates are low but they can fluctuate.  

forgot to add ...my investor friends tell me 10% to set aside for maintenance and vacancy for a newer property or one that is newly rehabbed or 15% for an older property on a SFH. Assuming these numbers would be higher for a place in a bad area. I have found for an apartment/condo in a market like New York City to be much lower than that cause super strong demand and nothing to take care of on the outside. So it needs to be adjusted to your situation and area you're buying.

You might want to also factor in a Property Manager if at some point you don't want to manage it yourself and/or if you use an agent to place a tenant if managing yourself. Depending on where you live the agents charge around 1 month rent to place a tenant. In NYC the tenant pays this fee cause it's a strong rental market here but I have found much better quality tenants coming from a broker than finding on my own. Also depending on the neighborhood you invest in you could have a HOA fee. And you might consider setting some money aside for capital expenses in the future ..roof...water heater...HVAC etc.

Good luck with everything @Ken Riedel !! I would recommend if you could find a really great attorney/accountant over there that specializes in these sort of legal structures to get a consultation to find out what your best options are and to protect yourself and your investments. I don't know the economy over there but in some of these emerging markets the cost of services can be really cheap and wouldn't cost a lot of money for the top professional advice. Also you'll need a good point person to ask all your legal questions as they come up to in regards to taxes, evictions, etc. Even in a country like South Africa where English is the main language I still get really confused with legal notices as their legal wording can be really confusing as it's slightly different than ours. I've needed someone to ask whenever I wasn't sure about legal stuff.