All Forum Posts by: Logan Zanki

he's on a fixed income and said he could handle an extra $100 a month. I'm currently trying to get him section 8 and I call every week but it's not open yet. Sectional is from the state and they would give me 1050 a month to house him. I don't think he can afford anything more then 700.

What do you think I should do with the unit that's paying 825?

Also what's your outlook on the purchase?

Your first issue is no tax returns. No FHA bank is going to write a loan with out you having tax returns. You will have to show two years tax returns and make sure that your accountant doesn't show a big loss because that will count against you. If you made 70k and had 20k in expenses the bank will only use 50k in income. also if show 20k the first year and then 50k the second, they will just average it out to 35k as your annual income.

Your second issue will be that FHA doesn't write investment loans, unless you purchase a Multi family and live in one of the units.

You might have to find a seller willing to hold a private mortgage with 10% down for 2-5 years. Then refinance when you have your credit and income worked out. Have a family member cosign with you for the private mortgage.

Hope this helps guys

sounds like a good plan to me and almost the same plan I have. The one key thing is showing the banks what they want to see. When purchasing future homes and keeping you first home they want to see that you can cover the mortgage for both properties.

Unless you have two years tax returns showing that you have been receiving rental income. Then they will let you use 75% of the rental income as your income on top of your own. So.... Like Matt said I would go with a Multi family purchase and use the VA loan for that. I would do that for more then one reason, 1) the renter will pay a large chunk of your mortgage if not all, 2) you will start to show rental income on your tax returns which will make life easier in the future when going for loans.

Hello everyone my name is Logan, I'm new to biggerpockets.com and i'm located in central New Jersey, my goal is to get out of the rate race by purchasing multifamily properties. Little background about me, I have 8 years experience of doing residential mortgages and small commercial loans.

My plan was to purchase the property using FHA as I did then in two years use the VA loan to purchase my primary property because I'm a veteran. During the time between now and in two years, I would like to joint venture or just purchase small homes on my own.

So here's my first step:

I recently purchased a 4 family house in Central New Jersey with two 1 bedrooms and two 2 bedrooms. The purchase price was 365,000, taxes are 9700, insurance is 1080. Because I did an FHA mortgage my total mortgage payment is $3200 including the FHA mortgage insurance.

Rents:

1 bedroom unit $900

1 bedroom unit $600 (his lease is up in 6 months, I'll increase it to $700 because he's been here for 22 years)

2 bedroom unit $825 (their lease is up next month, ill increase it to $1,200 because that's the going rate and I wouldn't mind different renters).

2 bedroom unit $900 ( me and my wife moved into this unit, the unit could easily be rented for $1,500 but were leaving in it)

Other expenses are trash which is $40 month for all the units in total. The renters pay for all their own utilities.

Repairs needed:

- new paint job on the outside - 12,000

- new flooring in our unit - $5,000 (all of the other units have new flooring)

The lot is half acre and has a Carriagehouse in the back which is 2,000 square feet. The house needs about $40,000 in repairs and then I should be able to rent it out for 1,800.

At the end of the day my total out of pocket was around $9,000 because I had the seller role the closing cost into the loan and did a seller concession for repairs.

Was this a good purchase, am I heading in the right direction? Because if I'm understand the 50% and 2% rule, then I'm doing thing the wrong way.

Also after I finish the paint job and floors should I focus on my next purchase or should I focus on restoring the carriage house first? I ask that question because values are low now and I only have a small window, the carraige house I already have.

and the electric for the common areas

Also what are you operation costs like, water, trash, taxes and insurance?

I'm a newbie myself but I think you will have to know more about the property to determine if it's a good buy and old or buy and flip. What are the current rents in the area, what are the current prices for the same style house? Is it an area that's growing population, what's the job market like? What would the value be after the repairs and can you increase the rents?

Its legal as long as you are on title at closing and not quick claimed on to title afterwords. Yes you can be quick claimed on after closing, but the lender has you sign a form saying that if you are they can call your note due. They do this to prevent straw buyers. You won't have an issue if it's a husband and wife but you might have an issue if it's looked at as straw buyer or partners. If you end up losing the house only your partners credit will be hurt and not yours if your only on title. Also neither one of you can sell with out the other one signing at closing. At the end of the day you will be fine as long as your on title. Your partner is taking most of the risk if he/she is the only one of the loan. Hope this helps.