All Forum Posts by: Ash Hegde

This can be a great way to get started. Turn a big expense into income by trading the equity from a single family into a down payment for a 2-4 unit house hack. 

If you are getting a mortgage, you could ask your lender about buying down the rate with seller concessions. 

If it was never used as a rental I would agree with your CPA that you will not be able to do a 1031 exchange on it. 

I don't have anyone at the moment, but based on posts in here, there are always people looking for good property managers. Welcome to the area!

Hi Cory, a DSCR loan is one that uses the performance of the rental property (rental income vs mortgage payment) to qualify rather than personal income ratios. They do generally have a higher fees and rates than conventional, but they are great if you won't qualify for conventional or as you scale up in number of properties.

Those are all good questions. I would also give them scenarios of what you want to accomplish and they should be able to tell you if and how they can help. 

The general guideline for conventional is to take 75% of rents (actual lease or market rent) as income. Your bank may have an overlay that doesn't allow them to count rental income at all. You may need to contact another lender to see their policy. 

DSCR mentioned above is also a possibility, this will take rental income vs mortgage payment with no regard for your personal income ratios. These are more expensive with rate and fees though.

With two years of tax returns you may be able to qualify for conventional, these will have the best rates and are worth looking at first. As Nate mentioned, hard money and DSCR lenders will not look at your personal income and there are other loans that do look at personal income but don't need tax returns - they may look at bank statements or even an accountant letter. They have higher risk to the lender though and are going to be more expensive.

Sorry, is this for a side business? If so, an S-corp can be the right move. I was assuming it was to hold a property. 

Agree. S-Corp is used more often for self employed people who want to avoid some of the self employment tax. If it's just for holding property, you'll  be fine leaving it disregarded, which is the default, meaning you won't have to file an 8832 election.