Who Wants To Know About L/O's?
I DO!
just s couple questions.....I had my first meeting with a mortgage broker I intend to use to get my T/B's financed. She said that there were a few things that concerned her, and b/c I don't have the anwsers...I'm passing these on to the ones that do (well...most of the time)
1. she was telling me that a land contract would be better b/c lenders will treat this as a refi. on a L/O, the lenders would only allow a certain % of rent to be credited to the down payment. any thoughts on this?
2. when closing, since the deed will only be in my name for a breif moment, can this be considered flipping? she was all over this b/c I guess the govt. is cracking down on this stuff BIG TIME. (something about seeing that we made money w/o putting up an investment) but i don't know much about it...so.......
3. What course do you all recommend to start learning more? I've had the whitney 3 day thing....pretty good info there, but I feel like I need to know some more on it.
Thanks in Advance!!
oh yeah, do most of you have business names like "something investments?"
i need a name to start out with...but can't really think of any......
1. Some lenders will consider the L/O as a refi also. You don't need to credit any of the rent towards a down payment. Stay away from that concept.
2. The government is cracking down on loan fraud (and they should). If your mortgage broker won't deal with lenders who have no seasoning requirements, find another broker.
3. Wendy Patton
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King:
If you don't recommend using a rent credit towards downpayment, do you offer rent credit toward lowering the final purchase price, or do you just stay away from rent credits altogether?
Thanks,
Andy
I looooooove rental credit. I apply it towards the purchase price only and use it to get higher than market rent (by doubling the extra rent in rental credit) and use it to motivate the T/B to never pay me late. I also transfer rental credit I get from my Seller to my T/B to give benefits to my T/B at no direct cost to myself.
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Thanks, King.
Another credit question: do you do it as a percentage of rent or a set amount or does each deal dictate which to use?
Andy
Each deal is different. I don't base it on a percentage. My norm (and I sometimes deviate from that) is to get an extra $200 in rent above the top market rents in the area and double it ($400) in rental credit (the other $200 I get from the Seller after explaining that they now get depreciation and can afford to give me a little rental credit). If I am paid after 5 pm on the 1st, the rent is late, and the T/B loses the rental credit ($400) for that month.
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