All Forum Posts by: Patrick Bavaro

@Mitch Davidson sound advice!! I appreciate the time in response. I guess my main points of clarification with the lender is regarding the date specified on the second home rider. As It reads today “from this date” is July 21, 2021. That’s the confusing part for me!

@Mitch Davidson what are your thoughts regarding new construction to perm loan for a 2nd home mortgage where closing of the loan(s) we’re on the front end of the deal (before construction began). As an example, I am in the process of a new build and signed loan documents for both my construction loan and my permanent loan back in July. With that, I also signed a “second home rider” that specified to the nature of “borrow must keep property available for borrowers personal use for at least 1 year after signing of this second home rider”. Signed the document back in July. Won’t start construction for another 1-2 months likely and that will then take another 6-8 months likely. Once the property is built (assuming it’s after the date on the second home rider in July), would that allow for LTRs? Or does a refinance need to take place out of the 2nd home mortgage to allow for LTR?

Thanks for your time!

Patrick

@Bruce Woodruff Great advice! Our trouble right now is that we did get the sellers to agree on paper to get a permit, but none of the roofers they have called are willing to take on the liability of putting their name on the work. 

@JD Martin Thanks for the advice and feedback. I think I am in agreement, just totally psyching myself out. Thanks again!

Good afternoon BP! 

I am in a bit of a time crunch on this to make a decision, but here is my story. My wife and I currently have 1 rental, 1 property that will end up being a rental under construction, and another rental property we are under contract on. The property we are under contract on is located in Ocala, Fl (Marion County). The home is a 4/2 and relatively modern with a kitchen island, new floors, etc.. The home would actually make a very nice rental property. However, my problem (or maybe its not and I'm making it one), is that the roof was allegedly replaced in 2018 by the previous owner of the property (not the current), and was not permitted. My insurance company told me that the only problems I will have is an increase in insurance premium, but I am worried about taking their word on that being the only problem as there is no physical verification that the roof was completed in 2018. The difference in premium is only about $250/yr so I am not that worried about the discount. 

What do I need to consider with the unpermitted roof? What issues regarding claims if I ever need to make one? 

Any help would be greatly appreciated It. 

@Zach Lemaster correct! I meant to add that I do expect It to be higher once completed. Thus far, the process has been positive! Thanks Zach.

@Stetson Miller You are absolutely correct! I have a plan in place to abide by the requirements :). I'm still going to be looking for a MFH  in the near future as well. I still see the updates and check them out regularly so keep them coming! 

@Ofir Weintraub Absolutely. I'm happy to help. Right now I am in "conditional approval to close" with the lender. Basically, I'm just waiting for the underwriter to finalize the file. The appraisal came back much under what R2R suggested it would come back at, but it is what it is. It came out exactly at $265k which is the exact cost of the land plus build cost. 

@Erica L. This link should help you!

https://guide.freddiemac.com/app/guide/section/4201.15

Being that the lender works directly with R2R, I am sure they are very aware of intentions of these properties but I am planning to refi in a few months after completion with a higher appraisal (benefit of this crazy market) to hit 20% equity without having to come out of pocket to get there. Maybe @Zach Lemaster can share some insight.

@Joel Miller I’m all about transparency on here! The lender I was required to use was Lake Michigan Credit Union and the officers name is Danny Donahue (his first name is Peter but goes by Danny). If you contact him, if you can mention my name It’d great (for relationship building).

I do want to mention that I am using a 2nd home mortgage product which is a bit better than an investment property. There are certain rules that I am required to follow with this property type regarding full year renting, etc.

@CLINTON PEARCY ooof!!! I’m praying that won’t be the case here lol 🤞🏻🤞🏻 thanks for the words of encouragement. This is only our 2nd investment property