First Time Investment Implications
Hello all,
I am exploring the option of going in 50/50 on a property with some family members in Florida. I currently live in Colorado and do not own any property. I am working to figure out how the lending process will work if I go in 50/50 with another party and also figure out the implications of owning a property in Florida that is not my primary residence. Am I considered a first time home buyer for that house or is it purely an investment? Also, will I lose any benefits when I go to purchase my first home to actually live in here in Colorado (first time home buyer incentives or primary resident incentives)? Could I still be considered a first time home buyer if the house in Florida is just an investment? Would it make sense to form an LLC for the investment property so that it is considered a business? Therefore I may be able to personally still qualify for first time home buyer incentives?
There are a lot of questions, I am just trying to figure out how this all would work and the best way to go about it to make the best decision. Who would I speak to about these topics, a lender or real estate agent?
Thank you!
There are alot.
Thoose you mentioned and
marriage
marital property
death
divorce
wanting out of the property.
Both TICs I have been in w/ "friends" destroyed the one, and significantly strained the other.
See if you can find some TIC agreements online as a base point.
I would be careful about using you own names, so as to not mess up 1st time home buyer status.
As long as you are just giving cash and you will not be on the mortgage, you are still a first time buyer.
But if they are giving you cash, and you are the closing the property with a mortgage in your name, then you are no longer a first time buyer. Anyone will be able to check credit history and see that you are a homeowner.
But if there is enough profit to offset losses of not getting 1st time homeowner funds, then u can consider going through anyway.
Unless this is immediate family, I would pass on it. I would even think very hard about investing with immediate family. Deals gone bad like this will destroy relationships and no amount of money is worth that.
Thank you for the replies, very good information. This is immediate family, and it is not a lot of money. We are essentially bottom fishing on 1 or 2 homes well under $100,000. This is why I want to make sure I will not lose first time home buyer/primary residence status when I go to purchase my own home in Colorado.
I will start calling lendors to determine what the best way will be to go about this.
In reference to the post above about just giving money into their mortgage to keep my name off -
Is it worth establishing an LLC for each property and having the LLC own half the property? Has anyone done this and what are the pros/cons for tax purposes?
Thanks everyone
Newkid,
So if I purchase an investment property, I can still qualify for the first time home buyer credits from the FHA?
This is ultimately what I am trying to figure out also, as well as the best method to go about it.
Quote:
On 2009-02-03 03:01, michaellee wrote:
Newkid,
So if I purchase an investment property, I can still qualify for the first time home buyer credits from the FHA?
"Yes, you can still be a first time home buyer even if you own an investment poorperty"
You had be very careful if you believe this above statement. Once you put that mortgage on your credit report, you can call it an investment if you want, but just dont be surprised if you get disqualified as a first-time homebuyer.
Good info, now I am wondering what "principal residence" officially means.
So from what it sounds like, if I want to keep any first time homebuyer benefits I need to invest "off the books" with whomever I go in with. Is this a correct assumption?
Easy enough to put this debate to bed.
Just call a lender or mortgage broker that is experienced in FHA loans. Ask the loan officer the following question:
I have been renting for the past three years. I have owned an investment rental property for several years but it has never been my main home. Am I eligible for financing as a first time home buyer?
Let us know the answer.
local property manager/investor looking to add to holdings?
I am curious what they do for 22%. What exactly does that include? I assume you rent by the week? I assume the fee takes care of advertising, booking, collection, key services, cleanings, and general management?
Their fee would not cover supplies, HOA/POA payments, electric payments,... etc. I only bring this up because I know of management companies that take care of these things (for a fee) for absentee landlords.
I own a Vacation rental condo 8 hrs away. I used an agency for several seasons until I found out they rented it and said it was empty. The kept 100% of income for that week.
I spent several days interviewing housekeeper/handymen at the location. I pay him for cleaning and minor maintenance. I rent through VRBO and collect my rent via cash or paypal.
I rent to mostly local (to me ) people tha I can exchange keys for rent and mail keys and parking permits to VRBO renters.