All Forum Posts by: Nate Downs

Thank you. That is all valuable information and it is very much appreciated.

Hello, I am currently looking at another property to buy and it has a half acre of land in town. I will more than likely buy and hold to rent the house and would like to sell part of the land as a separate lot. Can someone explain to me where to start to get the land separated and ready to sell as an individual lot? Thanks.

Hello BP, I am currently buying a 480 sq ft house that needs a bit of TLC. The lender I am working with at the moment is telling me they probably won't give me a conventional loan as a rental due to the size of the house and they think there will be a lack of comparibles. I would pay 20% down. I told them I would get it appraised and if it didn't appraise for what I offered then the seller could lower the price to the appraised value or I would walk away. I have enough equity in another property to buy with equity loan. It would be a six year ballon 20 yr ammortized interest rate of 3.25%. I asked if I fixed the place up and refinanced in a couple years would that be an option. She said yes. Why would I be able to refinance in the future when she hasn't even seen the property....confusing? I'm buying the house for 19,500. My question is should I consider looking for another lender? Why is this an issue? I have a very good relationship with this bank and not sure if this is something they can control or they are choosing to deny me the option. Also, if I buy with the equity loan I will only have about 75 bucks in cc and no down payment which is attractive. Any advice on the bank aspect of this as well as the deal aspect is greatly appreciated. What would bigger pocketeers do? Thanks.

Not an incredible amount more. It is a very small house with no yard or garage. My initial analysis is about 5,000 in fixes and looking at comparable properties it would appraise for around 10,000 to 15,000 more. It just has a lot of deferred maintenance. How much more would it have to appraise for you to do the equity route?

Hello BP,

I am buying a property for 20,000 and wondered what the pro's opinions are.

Should I pay 20% down and get a 30 yr loan at 4% and obviously pay all the fees involved with this or

I have another property worth 70,000 and have 50,000 in equity. The current installment loan on this property for 20,000 is 3.75%.

Should I do a new installment loan for the 20,000 (new home purchase) therefore paying no 20% down and minimizing loan fees? The kicker is the loan is a 20 yr with a 5 yr balloon. The interest rate would start at 4.25%

Any advice is greatly appreciated.

Thank you Michael and Bill. I am going to call my bank and find out what the misunderstanding is. Maybe I will need to use a different bank.

Sorry, I should have clarified... I did end up moving in for about six months while fixing up the property. I just don't want to have to do that every time I buy a property for a rental. I see here on BP lots of people have multiple conventional mortgages on rental property and wondered how they got them when my bank told me I have to use a commercial loan for investment property.

Hello All,

I currently have a conventional mortgage for my personal residence and one rental property. I have another rental property with a $24,000 installment loan. I have a couple questions:

When I went to purchase a rental property my mortgage banker told me I had to use a commercial loan if it was going to be an investment property...is this correct? I got around it by saying I was planning on moving into the property as my primary residence and that seemed to work. I would like to continue to use this bank and that is obviously not going to work every time I want to purchase another rental and I don't want to fib like that either. Any insight on this situation?

My other question is I have a property with a 15 year installment loan (currently 2 years into it) with a balance of $24,000. Interest is 3.75 for the first 5 years then ballons. I bought the property over 10 years ago for $36,000 and have done a lot of work to it and also used it to fund other purchases. It was originally financed with a commercial loan. Looking at comparable properties in the area this house would appraise for around $70,000 now. Is there any way to get a conventional mortgage on this property and get some cash from it? Do I even want to do that? What would one of you pros do to maximize this situation? I would like purchase another rental and just wondering if I have a great opportunity to extract some cash to put into a new investment. It seems there is potential here and I'm not educated enough to see it clearly.

There are two comparable properties that have sold within the last year from 90-100,000. Two of my are within a half mile of this property and not as big. They rent for 650 and 700 a month. Judging from other advertisements from houses this size and calling some property management companies I don't think it would be a problem getting 750 maybe 800. There is also a shortage of rental houses in this town at the moment so big plus. Really appreciate all the feedback so far.

Thanks Justin. I will crunch some more numbers.