All Forum Posts by: Rick Albert

Welcome to the BP forums!

What kind of investment property? SFR? House Hack? Multifamily? In-state versus out of state?

There are multiple ways to do this so just get clear and become an expert through studying and asking the right questions.

Why do 15 year mortgage when you can do 30 year? Lower payments and you could put less down. 

Keep in mind to get the best rates (including for refis) you have to live in the property.

Living with your parents can be beneficial since you would be living for free, but is that the lifestyle you want?

That $600 probably doesn't include vacancy, repairs, etc, correct?

I understand DSCR loans when buying, but let's say that I later on buy a new primary home. Would these loans count towards my DTI?

Hello!

I am wondering what the work around is to purchase properties without it counting towards my DTI. Because of how my Schedule E is with all of the write offs, it throws off what I can qualify for.

One thought I had was start purchasing under an LLC and have the LLC take out the loan. I'm getting conflicting information on whether or not it will work because I would the sole owner of said LLC.

Any advice would be appreciated. I buy all over the United States and plan on buying at least 2-4 more over the next 12 months.

Thanks!

 I would consult a CPA. She may run into gift taxes to the kids depending on the amount. If she lived in the property 2 of the last 5 years, the first $250K gain is tax free for her.

I wonder if the DIL is going to buy an investment property, why not just go in on it with the MIL and then he gets it through right of survivorship. This way he never touches the money (therefore never taxed) and she is good because the gains aren't tax anyways. 

This isn't my specialty but just my high level understanding. You really need to chat with a tax specialist. 

I'm going to let @Jason Wray confirm this as I'm not a lender. I'm not sure what the gift guidelines are for primary versus investment.

It is always important to know what you are signing. If I'm reading that correctly, it means if you back out then there is a fee that is likely coming out of your deposit. So for example if you cancel and have been in escrow for 14 days, that is a $1,400 penalty. That is something that should have been discussed before entering escrow.

 It is a hard maybe. Even though it is a bank there are still people behind it. I'm not sure if this is possible, but maybe the listing agent can do it and you increase your closings to pay them back. 

The worst thing that could happen is you cancel and you are out a few thousand dollars from inspections and the appraisal. Just make sure your contract is written well enough so you are protected.

To me it is worth a shot if the numbers make sense.

Alternatively, you could get the appraisal done, let it get called out and then have a conversation with the bank saying that this is all that is needed and with it is a full contingency release. You will pay for the appliances and installation. The bank wants it sold one way or another. You can explain to the Realtor that if you don't do this, then it has to be a cash buyer and they will offer less. I bought a triplex where the Seller (not a foreclosure) was lazy and didn't want to put in hot water heaters even thought he got full price offers. I ended up negotiating the price down using cash and got the property literally for 50% off the list price. 

People have already provided great input, so I will touch on your comment your wife said.

You really need to sit down with her and explain the short term and long term goals. I agree, you shouldn't slow down. I don't know how old you are, but I would put that in perspective. What I explained to my wife is the work we are putting it now on these properties isn't for today, it is for the future. By the time we are our parents' age, our properties could be paid off/cash flow well, and we are sitting in an amazing position. 

You can also set goals. For example, for every property you buy, cash flow can go towards something. For example, "hey wife, we just bought this property, let this be the travel fund. We can put the net proceeds in a savings account and use that towards our dream vacation." It is a compromise but you need to explain that this is important for you and WHY this is important.