All Forum Posts by: Nick G.

This is terrible advice. Not only would you then be disincentivizing and devaluing the person whom is working hard on your behalf, but it's also just completely untrue. Navigating the escrow process, particularly in California, is by far and away the most complex and challenging part of selling a property. It's not that escrow isn't a straightforward process, albeit with a fairly high number of moving pieces and frequent complications - the complexity lies in understanding what the best way to deal with an issue is when it arises without exposing your client to contractual or financial risk. That is much easier said than done in California, and ignorance of just how complex the escrow process can be - and how skilled an agent needs to actually be - is why the CA court system is so completely chock-full of real estate disputes.

Hey @Scott Tumath, a couple thoughts for you.

1. I wouldn't sell. Over a decade of on-time rent? That's phenomenal, and $600+ in cash flow is excellent, plus you have tenants that probably won't want to move out anytime soon because anywhere else will be more expensive. As far as I'm concerned, that is a golden rental, and I wouldn't mess with it. If the tenants ever move out, it would be a good time to freshen the place up, hopefully you've been socking away money every month for that - and your cash flow will thank you afterward.

2. I would not rent to your daughter if I were you. I've got a daughter and I get it, but no.

3. If your concern going into retirement is managing the property, hire a quality property management company.

I think that going into retirement is the time when you need to be hanging onto your cash flow more than ever. I believe that if you were to sell now, you'd probably regret it down the line, because I think that $600-$800 in cash flow every month from a single property would be a pretty killer bonus on top of your SS.

Just my personal thoughts.

Hey @Rusty Pollard, check with your broker, but yes, changing jobs may very well hurt your ability to qualify for the refi. If at all possible, try to not switch jobs until after the refi. If you're switching companies but staying within the same industry, it may not be as bad, but it's definitely not going to help either. I might reconsider looking at a rehab loan.

Sorry I can't be more help, good luck!

@Matt K. @Jon Panuska @Vernon McCarthy

Lender policies/requirements (also called overlays) will differ wherever you go, but no, Fannie/Freddie do not need lease seasoning in this particular scenario - but your lender will do a rent appraisal on top of the normal value appraisal to verify the rent numbers you are using.

If you were to move out of your personal residence and turn it into a rental, and you were using that rental income to help qualify for the debts of both your old property and the one you're trying to buy, then you will be required to show an executed lease in order to use that rental income when qualifying. But again, that's specifically when you're turning your primary residence into a rental and buying another home.

Hey there @Edgar Perez, I'm guessing you're living in one of the units? Most 90% LTV loans are owner-occupied and have PMI, so one option is to dump the PMI as soon as you hit 20% equity. However, it also may not be worth the cost of a refinance in order to save that $60ish/month, that's up to you and your cash flow situation.

I probably would not reinvest the money back into the property - I know there are plenty of people who do it both ways, but my personal policy is to let my properties pay for other properties - not pay themselves off. That's the tenant's job. 

So if I didn't dump the PMI, I'd probably either:

1. Let the equity in the property sit and grow, with which (after I'd moved out for a period of time) I'd 1031 to a higher-performance property at a future point in time, or 

2. Stay living in the property and take advantage of a nice owner-occupied cash out refi, there are 80/10/10 loan and other products out there that will let you take out up to 90% of the property's value - then take that money and buy more property with it.

Hope that helps!

Hey @Michael Swope. If I can interpret what I think you're saying, is that she has defaulted on loans 4 and 5 and is hoping that they just eventually go away and nobody ever comes after her for them.

I'm far from an expert in this area, but I can promise you that any institutional lender is 100% guaranteed to not simply forget about their loan to her, and she'll probably have collections people bug her for years. It will obviously be listed as a huge derogatory on her credit, and will serious hurt her creditworthiness for at least 7 years, during which time it's unlikely she'll be able to qualify for much of anything - maybe after several years if everything else is squeaky clean.

Sofi was the program I knew of. I have also seen people take out second mortgages or HELOCs on their home and paying off the student debt with it, this is actually a super-effective way to consolidate (and greatly reduce the interest rate on) your debt.

Perhaps you have a family member who would be doing to do so, and they can make that loan to you - maybe their refi is at 4.5%, and you pay them an extra 1.5% when paying it back to them. You're still saving tons of money compared with the interest rate of the old debt.

 Sorry I can't help more. My wife was in a similar situation years ago with medical debt, took her several years before she started seeing the light at the end of the trashed-credit-tunnel. Like me, you'd better do well enough on your own income-wise during those years, because you'll have to qualify for everything by yourself - cars, mortgages, etc.

Good luck man.

Hi @Jim Crogan, from my experience, having multiple LLC's across state lines often does nothing except cost you quite a few bucks and make you feel important. Any actual risk mitigated effectively by such a plan is often negligible depending on the situation. I would say definitely take the time to consult a tax professional, even if it costs you a couple bucks. Typically, I see the guys who are serious getting solid insurance policies most frequently, especially umbrellas, and they use LLC's very sparingly/selectively.

@Hunter Peterson It's just my personal opinion, but you'd be absolutely nuts to sell your place and go rent. 100% the way to go is to do a cash-out refi, there are some pretty nice products for owner-occupied properties, up to 90% LTV, I'm looking at one myself. I wouldn't do a HELOC today because in the event the market corrects sooner rather than later, the creditor may cut your HELOC off at the knees whether or not you used it. So a cash-out refi is the way to go, in my opinion.

The only major scenario I could support you selling in would be if you rented out your place and bought another to live in with a low-interest and preferably low-down loan (major bonus points if you house-hack by renting out rooms.) It wouldn't be a cash flow play, it would be almost entirely based on appreciation over the next 10-20 years (since the next 10 years will likely have both a correction and some recovery, meaning your major appreciation gains probably won't come around until after then, though you may have a healthy little bit of appreciation in the next 1-3 years, which is my belief for how much we have left in SoCal of this seller's market.)

I'd like to connect with wholesalers that procure off-MLS deals in any of the following areas:

Ventura County: Ventura, Saticoy, Bardsdale, Somis, Oxnard, Camarillo, Newbury Park, Thousand Oaks, Westlake Village, Agoura Hills, Oak Park, Moorpark, Simi Valley, Fillmore, Santa Paula, and the western San Fernando Valley in Los Angeles County, specifically Calabasas, Hidden Hills, West Hills, Woodland Hills, Canoga Park and Winnetka. I am also fairly open to Northridge, Reseda, Chatsworth, and a couple other nearby areas.

My clients (some of whom would be partners) and myself are looking for additional purchase opportunities for both flipping and holding. 

Please feel free to PM me or connect in whatever way is most convenient for you. Cheers, and thank you.

Hey @Kevin Fox, that's not typically an area I wander into, but PM/email/text me what you had in mind, I'm interested.