Hey guys, I’m new to the site and had a couple questions.I appreciate the help …
-After I complete the rehab, and I’m in my property for 70% of ARV, could I then go to the bank and mortgage my property for that 70%, or has the lending standards gotten too strict. What kind of credit score would I need? Is my thinking right and appraisals being crazy now, just be the variable? I would like to purchase my property cash, use hard money to complete the rehab and then cash out my investment and the loan with a traditional mortgage.
-Also, if I go to sell the property and give a deed subject to my loan, and the people stop paying, how hard is it to get them out? closer to a foreclosure or a tenant?
I appreciate all the help. I have learned so much from this site!
I personally have not made a Florida investment transaction since 2006, however out here on the west coast (California, Nevada, Arizona) lenders if they will even make a investment property refinance loan require that the property has been in your possession and seasoning for 6 - 12 months, they are not doing any cash out refinancing and they are requiring about a 720 plus FICO score for a full doc loan only!
They are very specifically checking employment, income and tax returns and in cases where you just rented the property will require the lease and may require your income to be large enough to make the payment regardless of rental income, or require your tenant to be in place minimum 90 days to except 75% of rental income.
If you actually give and record a deed, then foreclosure terms and conditions for Florida are the only way to recover the property! Your buyer would be recorded on title!
There are a number of mortgage guys on this site so it would be interesting to hear what Florida actually requires for investment properties now?
I will do my best to address all your questions. I have been a lender in Washington state for 16 years, but thing will be slightly different in your state primarily due to the declining values, where as the Pacific North West is on more solid ground, so we dont really have that issue so much.
Assuming your going to keep it a rental vs. an owner occupied, you can get a conventional loan - Fannie Mae, Freddie Mac for 75% LTV on a cash out, or 80% rate and term refinance.
The score that you will need varies from lender to lender, but at min. you will need your middle score to be a 620-660 or higher. Because you havent owned rental property in the past, they may hit you with the total payment of the rental, and not count any rental income to offset that debt. Once you have 2 years landlord experience they will let you count the rental income minus a 25% vacancy factor.
You will also need 6 months cash reserves for the mortgage payment. As for the potential of a foreclosure, I would look up your states foreclosure laws at www.foreclosurelaw.org, I did and it only allows a judicial foreclosure, so that means you would have to sue the person into foreclosure. Atime consuming and costly endevor