All Forum Posts by: Stephanie P.

Do I need to get a CA LLC for out of state rental properties if the LLC is for the sole purpose of qualifying for a DSCR loan?

I live in California and need to form an LLC to get DSCR loans. I do not plan to buy property in California with that LLC or conduct any business activities with it. I will be hiring property managers to manage the properties I purchase out of state. If I form an LLC outside of California do I have to form an LLC in California also?

Caveat that I'm less concerned about liability protection as

-I plan to get an umbrella policy

-I don't think it makes sense to pay the annual $800 LLC fee to CA unless absolutely necessary

 This sounds a bit extreme. Why not just rent the house out and find somewhere else to live? He can rent for a year if necessary, and doing so would allow him to rent advantage of owner financing in the future.

 Hi Stephanie, 

Thanks for your reply, I'm actually in the middle of renovating a triplex around the corner from the one you linked and considering this option. Thanks for your feedback! 
 https://www.zillow.com/homes/9...

Are you able to get a DSCR loan with little/nothing down on a rental property? I'm based in LA and would love to kickstart my investment journey by at the latest, September, but of course, my challenge is financing. Can anyone please advise me on the way to move forward. I've already identified a few properties with my agent.

As the title implies, my grandmother recently passed away and had a reverse mortgage on the home with a debt of $400,000 house is worth at least $800,000.

Main issue is I am self-employed, and my income is really low, but my credit score good (700-770).

A large room with its own entrance and bathroom was added onto the house like the 70's which can probably be turned into an ADU. I know there are some programs encouraging this by giving grants for this due to the housing crisis. But above all, my income is the problem. Since I can rent out the ADU I know some lenders would count that 75% of potential income onto my income, but they are hard to come by.

Anyone with info, or anyone interested in investing with me on this great deal. If your experienced in creative funding, lets talk! 

Thanks!!

Melissa, 33

Hayward, CA

Hi all, 

I know this situation may seem a bit odd I'll try to piece it together as best as possible. 

Last year I purchased a fixer upper home seller financed on an 18 month balloon, due to be paid back Jan 2024 through my LLC. My intentions were to rehab the home while I lived there, sell the home and repeat the process with the next home. After renovations were finished we have made the decision to refi and stay in the home, however, with our DTI being too high to use a primary home refi product our only current refi option is to use a DSCR loan. We would then rent the property from the LLC(lessor) to me and my wife personally(the tenants) each month. Fair market rent would bring the debt ratio to roughly 1.5. With more than a 100k in equity tied into the property I'm not in a position to leave the equity tied into the property.

My tax accountant has already told me that there is not a tax issue with us personally renting the home from the business but before I approach my commercial lender I've worked with I'm curious on what feedback this group may have. Renting this property to myself seems to obviously blur the lines of what a commercial loan is intended for, however, if the business is being compensated for the home it also seems to be serving its intended purpose? 

Any feedback is appreciated 

Scenario is your buying and flipping a single family home.  Banks are willing to give me around $70K for a conventional loan. I have excellent credit and a good job. I want 250K, If I took out a hard money loan, flipped the house, would there be a better chance that the bank would approve and buy off the hard loan now that the house has increased value? If not would getting a co signer help? I don't see the point in doing a hard money loan if you get denied a conventional loan, if you will only get denied again when refinancing.

Cash out question

My plan was to buy property using my heloc, whole lot cheaper than Hard money or private. Fix it and Then do cash out refi and pay my heloc back in 3-4 months.

I was about to get qualified with credit Union and come to find they will do cash out but only on the purchase price. That’s not going to work. They will do appraisal after a year. Seasonal period was a year.

How is anyone getting all there money back?

You don't know near enough info to make this statement. If this person has one or two properties  there is most likely no way they need a PM. The fact that he is asking this shows he is doing research. 
Property managers are vastly over rated considering most of us on here have more experience and can offer better advice for .....free. 

We have a 6-unit apartment located in Baltimore City (21217 Zip Code) that will soon be under contract for $28K.  The property needs a full gut and reno.  If anyone is interested, please contact me.  This deal will be a contract assignment.