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Old 10-26-2013, 04:40 PM
 
Location: Pittsburgh
953 posts, read 824,762 times
Reputation: 653

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Quote:
Originally Posted by thelopez2 View Post
Why haven't you refied the existing FHA to conventional? Non owner occ rates are low too.
why would I? I have a 3.7% rate on it and current rates would be higher. there are other reasons but mainly because I dont see much advantage. if there is some other benefit im missing please let me know.

appraisals are for absolute S%*t in my area right now, so although the g.r.m. says I should have about 30-35% equity, I doubt the appraisal will say the same. It could actually show me as under water from what I have seen with some other peoples appraisals as of late.

How can one get 2 fha loans? ( not that I want to with the new regs)
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Old 10-26-2013, 05:32 PM
 
Location: Southern California
4,350 posts, read 4,939,435 times
Reputation: 2129
The 3.7% rate is good depending on you MI, if you still have it. Getting rid the of MI is the only thing, but if it is already gone, then you are in good shape. The GRM is funny and recent sale are used instead. The lower sales comps just improve your GRM rather then increase your appraisal. If appraisal aren't going to help you ,then you don't have a option to go to conventional if you are underwater anyways.

I think you did well using FHA to by a positive cash flow property. Typical by the time you considered the MI , conventional and PMI is lower , but you might not have that option.

FHA can allow for converting your existing to an investment then "upgrade" and buy into another property. The MI and UFMIP is just so high, if you can get the seller to cover the cost, you are probably better off doing it that way.

I wonder what would happen if you buy the other property. Combine them and try to refinance it as a 5 unit, if the GRM will hold more weight. Are there 5 unit comps?
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Old 10-27-2013, 09:09 AM
 
Location: Pittsburgh
953 posts, read 824,762 times
Reputation: 653
5 units are considered commercial not residential. so i doubt that would help me.

but I do still have PMI. and its a good chunk of change. almost 300 a month. But even with that and living in a unit and keeping the 3 car garage for myself ( which was rented when I bought the place) Im still positive monthly. I had no option for conventional at the time of purchase since my income would not have covered the loan and fha allowed me to use 75% of rents to qualify me.

there are not a lot of actual comps in my area. for my comps 2 years ago, they had to both go outside of my zip and go back 12 months to find any. and even at that, they still used a 2 unit and a 3 unit in the determination. There is a duplex that is contingent in my immediate area that is a very similar building to mine. I may wait til its on the books and get an appraisal as it was listed at a grm of 125 and I would guess is under contract at around a 110 grm. I would think that should help my appraisal. But again, who knows. Appraisals around here just dont seem to make sense right now.
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Old 10-27-2013, 07:44 PM
 
Location: Southern California
4,350 posts, read 4,939,435 times
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question is, can I get a loan for the 2nd place with a 5-10% down payment if its going to be my primary residence?

As long as you qualify

and will I need to show that my work income can cover both even though I can show rental history on the current building and current leases?

No, because you had your units for 2 years on your tax returns

My current building generates considerably more income than my mortgage payment and that is with me occupying one of the apartments. By moving next door, the positive cash flow would be enough to pay for both mortgages and still be positive.

You won't be able to use the income from the unit that you are vacating, but it sounds like you wouldn't need to, to qualify.

Next question would be, If I can do this, is it legal for me to move in and fix the place up then move right back over to my apartment building and rent the single family home?

You will have to sign something about occupancy which will state the terms and how long you are expected to stay there.
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Old 10-28-2013, 04:50 AM
 
Location: Pittsburgh
953 posts, read 824,762 times
Reputation: 653
thanks lopez, But does this hold true if an appraisal of my building shows less than 20% equity? I have less than 10% based on purchase price to current loan value.
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Old 10-28-2013, 11:18 AM
 
Location: Southern California
4,350 posts, read 4,939,435 times
Reputation: 2129
A mortgage broker's job is to try to find something for you. If you goto a bank that loan person will will have limited products options. It really doesn't matter what I say if you loan person can't find something for you. The previous purchase price 2 years ago doesn't matter, that is probably now how they will consider LTV. Does the rental income show up on your returns for 2 years or just one?

It is time to start getting your paper work together to talk to someone about find someone to help build your empire.

While you are at it, how about turning that single family into a multi unit, it is apparently zoned for it. Make another 4 units and retire early.
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Old 10-28-2013, 05:15 PM
 
Location: Southern California
4,350 posts, read 4,939,435 times
Reputation: 2129
I meant the old purchase price is NOT how they will consider LTV.
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Old 10-28-2013, 08:44 PM
 
Location: Pittsburgh
953 posts, read 824,762 times
Reputation: 653
im too young to retire, but at least you understand my 20 year plan of building an empire. the single family one is too small to convert and my area only allows converting buildings to 2 units anymore, all 3 and 4 unit places are grandfathered in.

I have 2 tax returns with rental income, but one was only partial year. So this coming spring will most likely be my best bet to start trying to do something.

thanks for the help
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