All Forum Posts by: Stephen Chittenden

This seems like the critical language to me... "unless extenuating circumstances arise which are beyond my control."  My concern would be that the fact that your existing house didn't sell and that your flip is taking longer than expected would seem to do very little to keep you from occupying the property.  The only expense would be the moving cost.  I'm not sure why you can't move based on those reasons.

 Only 2 of the 4 members were on the loan. Different lenders may take a different approach. 

We just closed on a 30-year fixed loan at 4.875% for an LLC-owned rental property at 75% LTV. The lender is a local credit union. Personal guaranty required.

 I don't know if someone else pointed this out (I'm working my way down), but the show actually does account for 1, 2, 4, and 5.  It does not account for holding costs, but most of their flips are usually fairly quick, so those costs are probably not significant.  They usually don't have 1, because they are often using their own money.  When they have used hard money or borrowed from someone, I always have seen the show include an adjustment to account for interest paid or profit shares.

 You only make 60k per month? ;-)

As others have said, FHA loans are for owner occupants only, not investment properties or houses you intend to flip. As part of the mortgage process, you have to sign a rider indicating that you intend to occupy the property for at least one year. You can use this to flip on a longer-term basis, by using an FHA loan, moving in, and then doing the rehab while you occupy the property. After a year, you can sell the property and move someplace new. If you do not intend to live in the property for at least a year at the time you close on the mortgage, I believe it would be mortgage fraud, which is a federal criminal offense.

This is a winning answer. If you're not going to be doing business in a number of states, safe yourself a lot of hassle and just form the LLC where you are doing business.

 The comments here are applicable to you...

http://www.biggerpockets.com/forums/48/topics/2071...

Also, FHA loans are for owner-occupied properties, so I would strongly caution against buying a property using an FHA loan if the borrower does not intend to occupy the home for at least one year.

Changing the beneficiary of a land trust may also trigger a due on sale clause, though it is harder for the lender to discover. 

 In my limited experience, this is ALWAYS good advice.  Our project ended up 5 months long (almost 200% over our planned timeframe) and 70% over budget.