Burn That Belly
New member
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Investment Condo - Advice - OC/LA or AZ/CO/TX? 420K Budget
- Thread starter dream16
- Start date
zubs
Well-known member
dream16 said:
Multi-Level Marketing (pyramid)
Amway
Cutco
Lularoe
PrimeAmerica
USANA
Mary Kay
Herbalife
etc.
The companies above sell stuff through friends selling to friends and making friends part of the sales team so they can sell to their network. People can make money off of these MLM companies, but you have to be at the top or at least in the middle. If you are at the bottom, you will lose money. The only way to get to profitability is to get your friends to sell it to their friends and get a network yourself.
A lot of times you end up losing friends.
zubs
Well-known member
bones said:
Yes it is. MLM's products are ok if a little pricey. I have CUTCO knives that I still use and they are fine.
the problem with MLM is that if you are on the bottom rung you will need to "trick" someone to be under you or you will not make money. And this person you tricked will have to trick someone else or they will not make money...etc.
So when MLM's say it's hard work, but you can make money, It's true.
What should i do about this situation?
As per this, with 50k in equity, i am only able to qualify for a 47K loan at 94% LTV
http://www.bankrate.com/calculators/home-equity/loan-pre-qualification-calculator.aspx
How do i get a 225K loan? My 1st home has been rented for 18 months, so 0.75% of rental income should be considered - but despite that, i have a jumbo pending mortgage.
One key question i have is regarding the following:
You can certainly buy another home in another location, but there are certain conditions. First, you have to have rented out the home for a minimum of 12 months, reported it on your tax return, and made some income on it. If you will owe money each month and its negative income, it's a liability, not an asset and counts against you in your debt-to-income ratio.
Most lenders prefer a minimum rental history of two years, reported on tax returns, showing the property was profitable. A property can be profitable, but after depreciation and other expense deductions,mother property may show at a loss on tax return, but the lender will add back certain things like depreciation, etc. Again, if it's a monthly loss out the gate, you would have to show enough income to lower your DTI. (Debt to Income Ratio)
Also, your income has to show it can support both mortgages and you need reserves for both mortgages in order to qualify for a new loan.
If the above is true, how will i get a private lender loan? Because i am negatively cash flowing every year = 1st year was $11k and now with IRS returning more money due to house purchase in 2nd year of ownership , i might barely break-even.
Will private lender consider IRS return (20% returns on Mortgage Ins + Tax Paid) = mine came out to be ++$4200 extra in tax returns for 1st year.
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As per this, with 50k in equity, i am only able to qualify for a 47K loan at 94% LTV
http://www.bankrate.com/calculators/home-equity/loan-pre-qualification-calculator.aspx
How do i get a 225K loan? My 1st home has been rented for 18 months, so 0.75% of rental income should be considered - but despite that, i have a jumbo pending mortgage.
One key question i have is regarding the following:
You can certainly buy another home in another location, but there are certain conditions. First, you have to have rented out the home for a minimum of 12 months, reported it on your tax return, and made some income on it. If you will owe money each month and its negative income, it's a liability, not an asset and counts against you in your debt-to-income ratio.
Most lenders prefer a minimum rental history of two years, reported on tax returns, showing the property was profitable. A property can be profitable, but after depreciation and other expense deductions,mother property may show at a loss on tax return, but the lender will add back certain things like depreciation, etc. Again, if it's a monthly loss out the gate, you would have to show enough income to lower your DTI. (Debt to Income Ratio)
Also, your income has to show it can support both mortgages and you need reserves for both mortgages in order to qualify for a new loan.
If the above is true, how will i get a private lender loan? Because i am negatively cash flowing every year = 1st year was $11k and now with IRS returning more money due to house purchase in 2nd year of ownership , i might barely break-even.
Will private lender consider IRS return (20% returns on Mortgage Ins + Tax Paid) = mine came out to be ++$4200 extra in tax returns for 1st year.
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Q: how does someone prove that they lived in their primary residence when they actually rented it out and lived somewhere else?
COMMENTS ARE EYE OPENING:https://www.washingtonpost.com/real...411a84c9d55_story.html?utm_term=.3177c9ef44bd
Here's a comment from someone who wanted to get a second loan and was truthful:
I am currently refinancing my investment property and it is not easy. I bought the condo and lived in it for a few years but then got married and needed more space than I had. I have rented it out for the past five years under the original loan because you need a certain loan to value to qualify for an investment property loan, I finally got there and the rates are worse and I have to jump through multiple hoops to prove that I can maintain a property where my payments will be $300 less than they currently are. I had one prospective lender tell me that it would be a different story if I told him I occupied the residence. I couldn't believe lenders were still allowing and encouraging fraud but the strict rules for investment properties makes it tempting.
COMMENTS ARE EYE OPENING:https://www.washingtonpost.com/real...411a84c9d55_story.html?utm_term=.3177c9ef44bd
Here's a comment from someone who wanted to get a second loan and was truthful:
I am currently refinancing my investment property and it is not easy. I bought the condo and lived in it for a few years but then got married and needed more space than I had. I have rented it out for the past five years under the original loan because you need a certain loan to value to qualify for an investment property loan, I finally got there and the rates are worse and I have to jump through multiple hoops to prove that I can maintain a property where my payments will be $300 less than they currently are. I had one prospective lender tell me that it would be a different story if I told him I occupied the residence. I couldn't believe lenders were still allowing and encouraging fraud but the strict rules for investment properties makes it tempting.
Irvinecommuter
New member
I would say that it's not a good time to try and catch a knife...it's fun for the knife but not much for the person trying to catch it.
nosuchreality
Well-known member
dream16 said:
Yea, some lenders, wink wink, nod, nod. You need to decide if the lender was merely trying to explain to you why the pricing was high and that they'd have 'low' rates 'like you'd expect' if you were living there or if the lender was doing wink wink.
JIMHO, that wink wink, cuts both ways. If they're going to stick their golden goose, what are going to slide past you if they can?
As for rentals being expensive, tedious and difficult to refi, yes, because the lender wants their money back. The happy path with a rental is a good tenant that stays and only leaves major expenses when they move out, not including HVAC service, repairs, failed water heater, etc/. But that long term tenant now is a race against the clock to lipstick rehab and get it re-rented. The major expenses aren't from damage, rentals are just consumable. Carpet is useful live is 5 years. paint 3-5 years, water heater 10 years. The more affordable the rental, the more months of rent get consumed rehabbing.
Basically new carpet and new paint job is 5 years or less in a rental. If you're lucky, the first tenant after the lipstick is a neat freak, great tenant that stays 4 years and takes care of it. If you get just a 'good' tenant, well, you find yourself 4 years in after the 2nd tenant moves out having the debate of rehabbing early or renting with the 'worn' look which IMHO, decreases tenant quality considerably.