All Forum Posts by: Mike Burkett

@Aaron Gordy  I've been following this post and trying to keep up with what they are doing in Austin.  I guess I'm not completely surprised when I found this quote from the author of the bill:

While the bill makes the tax process more transparent, “it does not lower anyone's property taxes.”

“It was never designed to do that, and I've never promised anyone that it did,” said Burrows, a Lubbock Republican.

@Mark Weinberg  We are missing some key details here.  Assuming your fix and flip lender will lend you 100% of the purchase price and you don't do any rehab, then he is lending you 100% of the purchase price.  He is going to limit that amount to no more than 70% of the after repair value which would mean you are buying the house 30% below market price if you want 100% of the purchase price.   I'd want to hear a good reason why the seller was selling a perfectly good house 30% below market value.  

@Josh Barker  I'm assuming you are refinancing a rental property?  If you don't show sufficient tax return income or you have been self employed less than 2 years, low doc commercial loans are available.   The property will need to cash flow sufficiently to support the loan and your will need cash reserves and a good credit score.

@John Acheson A lender gets you net worth from a personal financial statement you submit to them. It is a balance sheet of all of your assets and liabilities including both personal and business. On the asset side you would show assets you personally own including houses, cars, furniture, life insurance policies, etc. If you have LLC's you would include assets of the LLC's also. On the liability side, you include outstanding personal liabilities like mortgages, car loans, and credit card balances. You do not include unused available credit on credit cards. For the business liabilities, you include outstanding liabilities of the LLC's. You add up all the assets and liabilities then subtract the liabilities from the asset. That equals your net worth. The lender will then use credit reports and other available sources to verify those numbers are correct.

@William P. Commercial investment loans are also available. 30 year terms are available. Upto 75% LTV as long as the property cashflow supports that loan amount. Generally they will require a personal guarantee from both partners.

@Andrew Simms  If the property only needs cosmetic work and you want to pay that out of your own pocke, you can get a Fannie Mae investment loan.  If it need more substantial updating that may take some time to complete, you are probably better off buying the property with a hard money loan, fixing the property, leasing it up, then refinancing into the Fannie Mae loan after 6 months.

@Alex San  Assuming you are buying rental properties, loans are available to you at far below hard money rates.  Yes, you are required to submit your tax returns, but income is calculated from the income of the properties, not your personal income.  

@Shahn Sattar @Jason Dillard If this transaction is done by the book, your lender (friend with the HELOC) would borrow the money against the HELOC, set up a business that lends money to you, and run the money through that company. You would pay the interest and principle to the new business and the new business would count as income the interest you paid on your loan. At tax time you would be able to write off the interest expense and the lender would pay taxes on the interest income the business collected from you.

The lender may or may not be able to deduct the interest he pays on the HELOC for his personal tax return depending on his particular tax situation.

@Taylor Scott Siemens  @Jay Hinrichs  This makes no sense.  Somebody is a loser in these transactions.  

@Billy Au-Yeung  Got it and responded.  Let me know if you did not receive my email.