Short selling a home and then immediately acquiring a new property ?
2012 Feb 26, 11:05pm 1,388 views 3 comments
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bubblesitter
2012 Feb 26, 11:36pm
I am not saying anything but get ready to be flamed along with some good advise. :)
If you have enough income to qualify for for two mortgages at once, then hang on to your current home while you acquire the investment properties. It shouldn't be hard to get a mortgage for the 2nd one w/ 25% down. Now, if you want to get multiple investments properties, I'm not sure how long it takes to be able to use the rental income from the new property to help qualify for the third one. I've heard some banks require the rental income to be declared on a 1040 tax return before can use it to get your Debt/Income ratio down, so that would take a whole year. I've also heard from others that you can start counting the new rental income as soon as you have a signed lease. The answer to that question (maybe someone on here knows?) will determine how fast you can acquire your rentals this way. Either way most banks only let you use 75% of the rent income in your D/I calculation. After you get your investment properties, then short sale or walk away from your current home. Of course I need to include the bit about this being unethical and immoral, but I also say don't hate the player, hate the game.
gregpfielding
2012 Feb 27, 2:57am
If I do short sale, how difficult will it be for me to buy one, two, three more properties this year for example? Each of these would be financed with 20-25% down.
It will be extremely difficult. Probably impossible. You can learn more about how short sales work here: http://bayarearealestatetrends.com/how-short-sales-work/
You will be blacklisted for three years if you do a short sale.
Now, if you are hell-bent on buying more real estate right now, you may still be able to do it if you keep your current property (at least until you purchase the others first). This used to be easy, until Fannie and Freddie stopped letting you "buy and bail" by requiring that you have at least 30% equity in your current residence before lending to you on another. However, there is a loophole where you could still get a loan on an investment property with an upside down house IF you can qualify for both payments together, without rental income. That might work for you.
But... what's the hurry to buy rentals?
Hi folks,
I know that a short sale will hurt credit, not as bad as a foreclosure of course, but people can struggle to purchase another place for up to 3yrs after a short sale?
I am looking for investment properties now but it may not make sense to own my current home which I bought in 2007 (gulp).
If I do short sale, how difficult will it be for me to buy one, two, three more properties this year for example? Each of these would be financed with 20-25% down.
What do you guys think?
Thanks.
#housing