My Personal Finance Blog

Funding has dried up for residential investment property (1-4 family), but it’s plentiful for large multi family projects.

1. Funds are available for large multi family properties, but not for residential investment homes.

President Obama said during his Economic Recovery Act Speech, “there is no money available for you speculators” and he meant it. Try to get a loan for a residential (1-4 family) non-owner occupied property and see the results for yourself. There are no more stated income loans available for residential investors. If you have been in the residential investment game for a while, you already know it, if you are just starting out; you will experience this problem on your first residential investment deal. Its cash, hard money at 12% and a 65% LTV or you’re done.

The good news is that government backed funds are plentiful for larger, multi-family properties. This presents tremendous opportunities for those who know how to access the funding sources.

2. You don’t have to personally qualify for the loan the properties qualify.

Imagine that! Anyone who has ever attempted to purchase a residential investment property (1-4 family) has encountered the issue of personally qualifying. Sure the rents may cover part or the entire mortgage, but the lender only considers a percentage of that income toward your ability to pay the new mortgage. You need, tax returns, financial statements, proof of funds for down payment, etc. Not only that, but of course your FICO score becomes a big factor. Get through all of this and every time you buy another residential property your FICO score drops and you are viewed as more of a risk to the lenders. The more successful you become in this arena, the harder it gets……

With commercial financing, the properties qualify for the loan, not you. The loan is not reported to the credit bureau’s. The more successful you become, the easier it gets…..

3. Most loans on large multi family properties are fully assumable.

Ever try to assume a residential loan without having to qualify for it? Not happening, at least not since the early 80′s when FHA and VA loans went from “fully assumable” to “qualifying assumable”. It’s the same as having to secure a new purchase money mortgage, so unless the interest rate is very attractive, it’s never done. The first home I ever purchased was a little bungalow for $25,000. It was 1980, I was 20 years old and didn’t qualify for a $200 limit MasterCard, but I assumed a $23,000 VA loan, no questions asked. The same criteria hold true to this date for large multi family projects, but very few know about it.

The financing on many large multi family buildings are fully assumable. Remember, the properties qualify not the buyer. You can buy 100 + unit apartment complexes without qualifying, no verification of funds, no credit report, no tax returns, just knowledge.

4. You ARE NOT personally obligated to repay the loan.

Try getting a residential mortgage and tell the lender that you don’t want to personally guarantee the loan. Not happening! We are accustomed to all loans carrying personal guarantees. It’s incorporated into every residential mortgage, by every lender in the country. Of course they want recourse if you default, they get the property and then have the right to a default judgment for any balance that may be due after they liquidate the property. Residential loans carry “FULL RECOURSE” to the mortgagee.

Larger commercial loans are “NON RECOURSE” to the borrower. The property and its ability to generate cash flow is the lenders security, not you personally.

5. Multi Family Properties are built to CASH FLOW, single family homes are not.

Single family homes are designed, built and price for owner occupants, not for cash flow. Study the numbers on almost any single family home and you will discover that after you pay the mortgage, taxes. Insurance, utilities, maintenance, etc, you will lose money every month. Single family homes are terrible for cash flow despite what the residential guru’s on TV tell you.

Multi family properties are designed, built and priced to do one thing and one thing only, “make money”. Lenders lend based on the fact that there are sufficient funds to cover the debt obligations, not on what your credit score is, or what the house down the block sold for or what your personal income was last year, etc…..

6. Professionals manage the property- No tenants and toilets to deal with.

With residential investment property YOU generally have to manage it. The property has negative cash flow to begin with; there probably is no budget to hire a management company to run it. You go from watching the guru on TV sitting by the pool telling you how great your new lifestyle is going to be once you buy a couple of homes, to fielding leaking roof calls and clogged drain problems on Saturday nights.

With the larger properties a professional management company handles all of that for you. It’s budgeted in just like taxes and maintenance. The lenders require a professional management contract be in place at closing. They handle all the problems; they are staffed for it and deal with repairs, collecting rents, renting vacant units, etc. They send the funds to you. You never have to deal with a single tenant, yet you reap the rewards. Now you have a lifestyle.

There are many more reasons to move from residential to large multi family including dramatically increasing the property’s value by simple rent increases, etc. I encourage anyone investing in residential property to take a good look at moving up to larger properties. It’s easier than you think when you acquire the knowledge.

Copyright (c) 2009 Joe Florentine

If you have seen on TV and other news media that the USA is coming out of the recession, then why will no bank offer you a decent, no balance transfer fee offer with zero percent interest for 12 months, zero interest on purchases for six months, and a generous 5% money back on purchases rolled in one card?

Well the answer is quite simple. The banks are really not too sure that the recession is over, and their lending standards reflect that. However, there is one way you can get a top, high cash back credit card in 2010 and 2011. The way to do it is to reduce your debt level, increase your FICO score, and then apply for a best cash back credit card you can find.

So what is the best cash back credit card for 2011?

Once you have established a high FICO score by reducing your debt, preferably to less than 25% of the credit limit on each of your cards, banks will compete for your attention with high cash rewards card offers. You will probably start getting attractive pre-approved offers in the mail again! Which will be the best credit card for you will depend on where you spend the most money. Let’s see a few possibilities:

If you carry a credit card balance

Maybe in this case you should not even focus on getting your money back as much but rather on developing methods of getting out of credit card debt as soon as possible. Look for a balance transfer card with the longest intro rate possible. And look for cash back debit cards in addition.

If you have high weekly grocery and gasoline expenses

Maybe you are taking care of a large family and spend significant amount of money on groceries and for the cost of transportation, that is gas? In that case, the best credit card for 2011 will give you as much as 5% off on all gasoline purchases and some grocery purchases. Likely, you will get the highest 5% money back by pumping gas at a single brand station such as BP.

If you travel much

When you travel across the globe or within the USA, you could benefit most from a no-limits miles card. You will receive multiple miles, up to 5, for purchases of airline tickets, and lower amount of miles on all other purchases. Combining frequent flyer miles with the miles earned through purchases, your rewards will come quickly and will be easy to redeem.

For everyone else…

For everyone else, getting cash back on most purchases makes the most sense. While there are no cards that will give you high, as much as 5% cash back on all purchases, you could go ahead and get two or three different cards that will have high cash back of 5% at different times of the year. Thus, by rotating your cards, you could earn 5% on many purchases throughout the year. Of course, shuffling credit cards like that requires quite a sophisticated tracking system.

How high would your credit score need to be to buy a house in 2011 with the current market? This question will have a multitude of answers from the different experts out there, but actually what we all really want to know is 1) What score do I need to qualify for a mortgage loan and 2) What score will give me the best interest rates on a mortgage loan?

Back in October 2008 the minimum score someone needed to buy a house was 700, but in November 2010 Bloomberg reported that recently mortgage lenders including Wells Fargo & Co. and Bank of America Corp., who are two of the largest mortgage lenders in the US, raised the minimum FICO credit score to 640 from 620.

The San Francisco Chronicle reported in September 2010 that if your FICO score was in the 600′s, you would be fortunate if you were approved, and if your score was between 700 and 750 you would very likely get approved, but it’s unlikely you would be offered the best deal.

So it looks as if your credit score to buy a house in 2011 would need to be greater than 750 if you were looking for the best interest rates. But your score is just one of the things lenders take into account when considering your mortgage application. They also look at your debt to income ratio, and the size of your loan application in relation to your income.

If you do not know what your score is currently, then before making application for a mortgage, it’s advisable to get your score and check it to ensure that it’s correct. You can always just go ahead and apply and see what happens.

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http://www.FHAmortgageProgram.com   is your one stop shop for everything FHA loan  related in Florida. As an Florida FHA mortgage lender specializing solely in FHA  home loan in the state of Florida we are well versed in every aspect of the FHA home loan in the State of Florida.  Florida home buyers should know the many advantages of the FHA mortgage loan programs. FHA loans were created to help increase home ownership. For the Florida FHA home loan applicant the FHA program can simplify the purchase of a home, making financing easier and less expensive than a conventional mortgage loan product. Some highlights of the Florida FHA loan program include:

Minimal Down Payment and Closing costs.

Down payment less than 3.5% of Sales Price Gifts are allowed Seller can credit up to 6% of sales price towards closing and prepaid costs. 100% Financing available No reserves required. FHA regulated closing costs.

Easier Credit Qualifying Guidelines such as:

  No minimum FICO score or credit score requirements. FHA will allow a home purchase 1 year after a Bankruptcy. FHA will allow a home purchase2 years after a Foreclosure.

To take advantage of the FHA program in Florida, give us a call 1-800-570-0448 begin_of_the_skype_highlighting              1-800-570-0448      end_of_the_skype_highlighting or use our quick application to find out more about the many FL mortgage programs we can make available. Or Apply now for a FL FHA home loan.

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Since the Florida mortgage meltdown went bust there has been a massive increase in Florida FHA mortgage applicants. Florida FHA loans have become popular for many reasons. Some of the reasons that FHA financing has become the best source of financing for Florida homebuyers  purchasing or refinancing their primary residence includes:

High LTV Florida FHA Home Loan Purchases- Florida FHA mortgage lenders allow for 97.75% of the purchase price to be financed. Conventional Florida lenders requires a minimum of 10% of the purchase price to be put down from the Florida home buyer. A Florida fha loan will save any buyer purchasing their primary residence from having to put the additional 6.25% of the purchase price that conventional financing would have required them to do. This higher loan to value allows the florida FHA loan applicant to keep more of their hard earned money in their pockets instead of locked up in the equity of the Florida home. In today’s market where sales prices have been falling it makes perfect sense to keep as little out of pocket expenses locked in the equity of Florida home as possible. 

Now More Florida property types allowed for FHA Financing – Florida FHA home loans now allow Florida home buyers to financing not only your typical 1-4 unit single family or multifamily homes, but also mobiles homes, Florida manufactured home loans, condos and townhouses. Conventional Florida mortgage lenders will not do Florida mobile homes or manufactured homes and they put sever restrictions on financing condos or townhouses. This is another reason that the Florida FHA loans are  far superior to conventional financing in Florida. If you have a property type that others have turned you down over, we can show you how to use a Florida FHA home loan to meet your needs!

FHA mortgage insurance cost less – Florida FHA mortgage loans provide much lower mortgage insurance premiums than conventional financing does. Typically your  FHA mortgage insurance will cost a Florida FHA mortgage applicant  1/2 of the cost of conventional Florida mortgage insurance. This is even more monthly savings that a Florida FHA loan will be able to provide over your typical conventional loan. 

Higher FHA cash refinance limits allowed - Florida FHA cash out refinances will now allow for 85% of the appraised value of the Florida home  to be obtained when doing cash out on your Florida home. If you just want to lower your interest rate, Florida FHA refinances can go up to 96.5% of the value of your home to help you lock in a lower 30 year fixed Florida mortgage rate. Conventional loans only allow borrowers to cash out up to 80% of the value of their homes. The Florida FHA loan allows an additional 5% over what typical conventional lenders will allow. More cash in your pocket with a Florida FHA cash out refinance!

www.FHAmortgageFHALoan.com

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Arcadia :: Boca Raton :: Boynton Beach :: Bradenton :: Brandon :: Cape Coral :: Clearwater :: Clewiston

Crestview :: Daytona Beach :: Deerfield Beach :: Deland :: Delray Beach :: Deltona :: Destin :: Englewood

Fort Pierce :: Ft. Lauderdale :: Ft. Myers :: Ft. Walton Beach :: Gainesville :: Hollywood :: Homosassa Springs

Jacksonville :: Key West :: Kissimmee :: Lake City :: Lakeland :: Lynn Haven :: Marathon :: Marco Island

Melbourne :: Miami :: Miami Beach :: North Fort Myers :: North Miami Beach :: Naples :: Ocala :: Okeechobee

Orlando :: Ormond Beach :: Osprey :: Palatka :: Palm Bay :: Palm Beach :: Palm Coast :: Panama City :: Pensacola

Pompano Beach :: Port St. Lucie :: Punta Gorda :: Santa Rosa :: Sarasota :: Sebastian :: Sebring :: Springhill

St. Augustine :: St. Petersburg :: Tallahassee :: Tampa :: The Villages :: Titusville :: Venice :: Vero Beach

Wauchula :: Wesley Chapel :: West Palm Beach :: Winter Park

Serving These Fine Florida Counties:

Alachua :: Baker :: Bay :: Bradford :: Brevard :: Broward :: Calhoun :: Charlotte :: Citrus :: Clay :: Collier

Columbia :: Dade :: DeSoto :: Dixie :: Duval :: Escambia :: Flagler :: Franklin :: Gadsden :: Gilchrist :: Glades

Gulf :: Hamilton :: Hardee :: Hendry :: Hernando :: Highlands :: Hillsborough :: Holmes :: Indian River :: Jackson

Jefferson :: Lafayette :: Lake :: Lee :: Leon :: Levy :: Liberty :: Madison :: Manatee :: Marion :: Martin :: Miami-Dade

Monroe :: Nassau :: Okaloosa :: Okeechobee :: Orange :: Osceola :: Palm Beach :: Pasco :: Pinellas :: Polk

Putnam :: Saint Johns :: Saint Lucie :: Santa Rosa :: Sarasota :: Seminole :: Sumter :: Suwannee :: Taylor :: Union

Volusia :: Wakulla :: Walton :: Washington

FHA :: Mobile Homes ::

Yes it is very possible to buy a Florida home with No Credit Score or No FICO.

Developing a Credit History or Enough Credit

The lack of a credit history, or the borrower’s decision to not use credit, may not be used as the basis for rejecting the loan application.

 Some Florida No credit mortgage applicants may not have an established credit history. For these borrowers, including those who do not use traditional credit, the lender must obtain a non-traditional credit report from a credit reporting company or develop a credit history from one of the following examples

? 12 months canceled rent checks, Money orders, or direct deposit Receipts from the bank

? Other means of direct access from the credit provider.

o gas

o electricity

o water

o land-line home telephone service, and

o cable TV.

? Insurance coverage (for example, medical, auto, life, renter’s insurance (not payroll deducted) payment to child care providers – made to a business providing such services, school tuition, retail stores – department, furniture, appliance stores, specialty stores,  rent to own – (for example, furniture, appliances) payment of that part of medical bills not covered by insurance, Internet/cell phone services, a documented 12 month history of saving by regular deposits (at least quarterly/non-payroll, deducted/no NSF checks reflected), resulting in an increasing balance to the account, automobile leases, or a personal loan from an individual with repayment terms in writing and supported by cancelled checks to document the payments. The More ammunition we have to prove you pay your bills the better. letters from a direct service

providers must be on letter head and include the following:

? creditor’s name

? date of opening

? high credit

? current status of the account

? required payment

? unpaid balance, and

? a payment history in the delinquency categories (for example, 0×30, 0×60, and so on).

 Apply today for a Florida No Fico score home loan at

 

http://www.FHAmortgagePrograms.com