All Forum Posts by: Ash Hegde

I don't know how common these are in your area, but maybe look for a single family that has an ADU that you can rent out to give you more space but also house hack.

You can't do a traditional BRRRR with hard money on a primary but you can get a rehab loan such as the FHA 203k if you buy something distressed if you are looking to force some equity.

I agree with Devin. Without experience, I think flipping is a fairly risky first move and a multifamily house hack is the opposite. You have a chance to cut your monthly living expenses by renting the other units, giving you some financial freedom for your next move. Flipping is not necessarily bad though, it builds capital quickly.

Sorry for your loss. 

Paying off your house is not a taxable transaction. You will lose the interest deduction going forward (if you were itemizing to begin with). I can't think of any benefit for using your 401k to pay it off now and paying yourself back. You'll be saving your mortgage interest rate and paying the 401k interest rate for that time period. 

Your hard money lender should be able to give you some documentation (sometimes called proof of funds). 

Some localities will have restrictions on short term rentals, it's good that you are aware of that, certainly something to check before making an offer. The numbers usually work out better with short term rentals (if they are allowed), especially down here where we get a lot of tourists. 

You're on the right track - using an FHA loan on a duplex is one of the best ways to get started!

You might qualify for a conventional loan based on your personal debt to income ratio, but you will not be able to get the FHA 3.5% down payment option. You would have to put 25% down.

You may be able to do something with your children however. They could be the owner occupant and primary borrower, and you could be the co-borrower to help them qualify. This would allow them to use the 3.5% down option and you can gift them the down payment. 

@Michael Poloncic in Florida they are called "articles of organization" for an LLC. "Articles of incorporation" is another common name for them. It will be the document that you file with the state to establish the business.

For conventional loans, adding additional debt will affect you as mentioned above. Increase personal income, lower personal debt, and keep your credit score high, they will all factor in. 

There is a DSCR loan product for investing that ignores personal debt to income ratio and instead is based on the rents vs the mortgage payment. These loans have higher fees and rates than conventional though, so if you qualify for conventional, go that route.

It's normal for a bank or credit union to say no to a HELOC if it is owned by an LLC. Most HELOC products are for primary residences only, which would be owned personally and not with a company.

Generally speaking, lenders will want formation documents, EIN letter, and operating agreement when lending on a property owned by an LLC.