All Forum Posts by: Michael Dunn

David Zheng, 

2 months is amazing , How did you get the Lender to account for just showing 2 months of Rent on a Rental ?

Was this your 1st Rental ?  2nd ? 

David Zheng

I want to make sure I understand the Following correctly please......

Come Jan. 1st of 2017 , I will be able to FINALLY claim the Rental Income from one of m Rentals for the First time , and therefore have the Rental Income go on my Taxes as REL Income , and thus Increasing my Yearly Income / Helping to lower my DTI

My Question Is:

Would I be able to then Immediately , claim the Rental Income on another Property ( my Primary ) , as I am strongly considering renting it out at the first of 2017 ( since the 1 year mark that I will have owned my Primary will be up )as Rental income  ( Meaning , if I was to go to a Lender for a Loan , would they use the Income from the Rent that I start receiving from my Primary Immediately , or would they only use the Rent I receive from my primary on 2017's taxes ..... I.E. roughly 1 year from the day I start to rent out my Primary residence ?

I am hoping that since I will have owned and been Renting out a Rental property for all of 2016 , that when I go to Rent my Primary residence out , that they will use the Income I receive from renting my Primary residence IMMEDIATELY , as this will help me in getting a Loan to purchase an Investment Property ?

Sorry if my question is a bit confusing ..... I tried to explain it in Layman,s terms as best I could lol

Thanks for the help 

Kevin Harrison,

Thank you for your reply

A quick Breakdown n my current situation and what I'm looking to do with the $ from either a Cash-Out Refi. or a HELOC .......

1. I have $40,000 in Equity in my Primary ( which is currently a FHA loan )

Given my DTI and Bills, I'm likely going to only qualify for a $27,000 ish Loan/Refi. ( Even though with using my VA loan for the Refi. I could get upwards of $30,000 .... my Bills every month and the Max DTI of 45% , are only going to allow me to get roughly $27,000

So given this, I only have $27,000 to play with 

The Property I am looking to buy, needs $15,000 ( Materials Only ) in upgrades/Repairs, And I will be doing almost all of the Work ( I''m a Sub-Contractor by trade )

So Unless I can get this Property for $15,000 ( All CASH offer to the Seller ), I won't have any money left over for any Materials , BUT I'd have a Property paid for , that would Have Roughly $$80,000 of Equity in it , And it also has 2 Living Units  ( a 400 sqft. unit that has a bathroom and kitchen , and then the Main house that is 2 bed , 1 bath and about 1500 sqft. )

This property is Very Distressed state ( Which is good for me ) , soooo I may be able to get it for $30,000 as an ALL CASH offer to the Owner(s) ...... This $30,000 would come from the $27,000 I'd et from the Refi. or HELOC , as well as $3,000 I have saved back in Cash.

a $30,000 offer price, is much more Likely to get accepted vs a $15,00 Offer, but with the $30,000 , there's no $ Left Over to do ANY Repair work 

I really Don't want to wait and try and save up X amount of Dollars to do the repairs, and have someone come over top of me and get this property.   

I'd rather Buy it, and little by little Fix it , Until both Units are Rent ready, then rent them both out

A $30,000 Refi. will only add roughly $150 to my current House Note.... So not bad at all, to have $80,000 in Equity ( When fixed up )

Your thoughts Please

And thanks so much for your help 

Brendon Woirhaye,

Excellent advice 

Thank you so much for sharing , and for putting a perspective on the Situation.

I'm going to go see my Lender this coming up Thursday to talk about getting a VA Refi. on My Primary , so I will make sure and pose this question to them as well

Thank you again 

Alexander Felice,

Thank you for your reply

I wasn't aware that some Lenders will only use 75% - 80% of the Rental Income , as Income .

Will some use the full 100% of the Rental Income ?

My Lender here in my area , that I purchased my Primary Residence through , said that they have a 1 Year Rental policy ...... So come Jan. 1st of 2017 , I'll be able to use all of the Rental income from 2016 as Income on my Taxes.  And then from here on out, hopefully I can as you said ..... I can stat claiming every rental property from that point forward , as Immediate Income , vs having to wait 1 year " Per " Rental.

I do need to ask them though, what % of the Rental Income that they use .... 75% , 80% or 100% 

Thanks for your help 

I need some help please in answering a question , which is .....

Is there any Seasoning Period that you have to wait for, until you can do a Cash-Out Refi. or a HELOC on your Primary residence, IF you plan on Refinancing using a VA loan ?

My lender told me that for a Conventional refinance ( I have a FHA loan on my Primary currently ) , you have to wait 1 year from the time that you closed on your House.

So i was wondering if a VA Loan has a Seasoning period at all ?

I have been in my Primary Residence for 7 months ,

Thanks so much 

Josh Mitchell and Justin Howe ,

Thank you both for your replies 

So does this mean that , I have to wait 1 year from the Date that I begin renting out a property , before It will be considered as Rental INCOME ?

Or, once I wait 1 - 2 years ( depending on the Lender ) that I have owned m FIRST rental, that very rental from then on , I will NOT have to wait 1 year before I can claim the rental Income as Income ?

It would be nice to rent out a property, and if you've only been renting it out for 4 months before the end of the year  , that you can claim that 4 months worth of Rental Income on your taxes for that year ..... Is this how it works ?

Thanks much 

Thank you Ned

Just had a quick question please, regarding Cash-Out refis. 

1. Do you get the Amount of Cash from the Refi. sent to you , via a Check ?

2. Do you start paying Interest as soon as they Lender writes you the Check ?  

3. So with a Cash-Out refi. vs a HELOC ...... with a HELOC, you only pay on the Amount that you " Take Out " from the Total that you have at your disposal to use ?

4. Are there any Benefits to doing a Cash-Out Refi. vs a HELOC ?

5. I am wanting to have Immediate access to the $ ( whether I go with a Refi or a HELOC ), as I will be using this Money to pay in Cash for an Investment property that I am Looking to Purchase.

So would one of these be more benificial to me than the other and why please ?

Thanks much 

I have a quick question please, regarding How Long you have Rent out a Property, for it to Qualify as Rental income on your Taxes ?

Say I Rent out my Property in March ..... Would from March till the End of the year ( so 9 months ) , would this be Long enough amount of time for it to qualify as a Rental/Rental income via my Taxes ?

I am trying to make sure that I fully understand if I'll be able to claim this as Rental Income, since I need to show this as EXTRA Income in combination with my Income from work , to Help with my DTI , with regards to getting Financed and approved for a Loan for my next Rental Property.

If I can't claim the Rental Income for 9 months ( vs 1 year , which is what I've heard Lenders want to see you having been renting out any Single property ) . then i won't be able to get approved on a Loan for the next Rental

Hopefully my question makes sense lol

Thanks so much