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post #1 of 35 (permalink) Old 12-27-2011, 03:09 PM Thread Starter
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Need some info of a purchase

Looking to buy a second home outta state. Long story short my Grandmother passed away 2 weeks ago and my grandfather moved in with my Mom and stepfather as he is getting pretty old. I can get the place for really cheap but I am wondering about a loan. I just bought a house recently and this house I want to buy will be a vacation/investment property. How do loans and taxes work on a home you will not be living at? Is it the same as a primary dwelling home??
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post #2 of 35 (permalink) Old 12-27-2011, 03:12 PM
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which track is it near?
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post #3 of 35 (permalink) Old 12-27-2011, 03:17 PM
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I know everything you need to know about this situation, but my lips are sealed till I get some stevestyle pics of Marr's ass.

Everyone, let's hold out giving any info till we get some stevestyle pics of Marr's ass.

"includes 10 used-car dealers or auto repair shops, 11 liquor stores and bars--two of which advertise lingerie fashion shows and a third billed as a "gentlemen's club"--three cut-rate motels and one trailer park. The squat, brick municipal building is next to a currency exchange and a few steps from an adult video store. The bars open at 10 a.m. and close at 6:30 a.m."

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post #4 of 35 (permalink) Old 12-27-2011, 03:18 PM
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Higher interest, bigger % down payment.
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post #5 of 35 (permalink) Old 12-27-2011, 03:21 PM Thread Starter
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Higher interest, bigger % down payment.
Thats what I was hoping wasn't the case. ugh
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post #6 of 35 (permalink) Old 12-27-2011, 03:22 PM Thread Starter
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I know everything you need to know about this situation, but my lips are sealed till I get some stevestyle pics of Marr's ass.

Everyone, let's hold out giving any info till we get some stevestyle pics of Marr's ass.
She is single now you can ask her urself.
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post #7 of 35 (permalink) Old 12-27-2011, 03:22 PM
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She is single now you can ask her urself.
I'm married lol that is why I live vicariously through you

"includes 10 used-car dealers or auto repair shops, 11 liquor stores and bars--two of which advertise lingerie fashion shows and a third billed as a "gentlemen's club"--three cut-rate motels and one trailer park. The squat, brick municipal building is next to a currency exchange and a few steps from an adult video store. The bars open at 10 a.m. and close at 6:30 a.m."

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post #8 of 35 (permalink) Old 12-27-2011, 03:23 PM
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You'll need at least 20% down, probably more for a non-resident property loan from the bank. It'll likely be easier to get the loan if you call it a second home / vacation residence rather than investment property, but then you will need to have enough income to make the payments on top of your current bills (for a second home) without any expected rental income.

Property taxes are possibly a bit higher as well, as it will not be your "primary" residence, but this varies by state.

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post #9 of 35 (permalink) Old 12-27-2011, 03:27 PM
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Taxes are typically higher in a home you own but do not live in. When you live in a home you own you qualify for a home owners exemption. I made a mistake and did not fill that paper work out when I moved into my house. Cook county was taxing me like I didn't live in it. Fucking assholes
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post #10 of 35 (permalink) Old 12-27-2011, 03:31 PM
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I'm married lol that is why I live vicariously through you
like that changes anything



Steve, down payment is ususally about 15% or more, taxes all depend on where it is. States like FL will tax non residents higher than a permanent resident. Check with the local city hall and ask them. Because that's up to them. The good thing is rates are back down into the 4's so you can still pick up a decent rate.

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post #11 of 35 (permalink) Old 12-27-2011, 03:40 PM
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You already own a home, how would they know it is not going to be your primary residence? Just apply for a loan like you did for the first house and pretend you will be living there.

Once you get the mortgage just make sure you declare it on the taxes as a secondary home and you will be alright. As far as I remember you can't deduct real estate taxes from your Income Tax but I might be wrong.

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post #12 of 35 (permalink) Old 12-27-2011, 03:43 PM
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What town is it in?
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post #13 of 35 (permalink) Old 12-27-2011, 03:48 PM Thread Starter
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Its outta state Nick. In northern MI down the street from Lake Huron. If is was on lakefront property I know for a fact I would not be able to afford it since taxes are crazy in MI on lakefront property.
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post #14 of 35 (permalink) Old 12-27-2011, 03:50 PM
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What town is it in?
I will need this info as well to determine if this is a good investment for you (or maybe because I want to know if it's near any trail systems).
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post #15 of 35 (permalink) Old 12-27-2011, 03:51 PM
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talk to jrock - he's got a cabin out of state.
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post #16 of 35 (permalink) Old 12-27-2011, 03:53 PM Thread Starter
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Its about 30 miles south of Alpena MI off of US 23
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post #17 of 35 (permalink) Old 12-27-2011, 04:01 PM
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We should all throw down and split it. Then we can go dirtbiking and snowmobiling up there. Lol
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post #18 of 35 (permalink) Old 12-27-2011, 06:03 PM
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You already own a home, how would they know it is not going to be your primary residence? Just apply for a loan like you did for the first house and pretend you will be living there.
.
The bank will see right through that, they'll want copied of the HUD or sale from his current property. If not they'll slap him upside the head for even thinking that.

Isn't Ken ballin from the ad space he sells on here? Just tell him and Tony to buy it and make is CLSB pad.

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post #19 of 35 (permalink) Old 12-27-2011, 06:05 PM
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is there a stripper pole involved?




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post #20 of 35 (permalink) Old 12-27-2011, 06:22 PM
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Check with some lenders about the LTV . If the house is worth 100k (market value) , have a bank give you a first (lets say 70k) then work the second out with the seller . Seems like you'll have money to put down anyway . The sellers second will likely be acceptable to them . Does this make sense ? Rates for a second home are marginally higher , not enough to make any noticeably impact on your payment . Taxes and insurance should be fairly cheap , assuming its not a 5k sqft house .

Is this house anywhere near the MCCCT ?
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post #21 of 35 (permalink) Old 12-27-2011, 09:08 PM
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Did you use a VA on your current house? I'd see if they'll do another loan on this property.

I thought they didn't do investment properties, but I'm not 100%.
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post #22 of 35 (permalink) Old 12-27-2011, 09:39 PM

 
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If the seller is your grandfather I'm quit sure you can arrange with everything legal a purchase that pays him monthly and commits final payment at his passing.

Alot of older folks do this while staying in the home and needing the income.The buyer gets a good price while the owners stay.You then have to finalize the deal with the estate.

Look into it and good luck.

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I'd love to help but I don't chase parts.
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post #23 of 35 (permalink) Old 12-28-2011, 07:01 AM
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The option on a seller held 2nd mortgage mentioned by Stanimal is often workable. If you are buying the property from a family member, another option to consider is a "gift of equity", wherein you purchase the property and the seller "gifts" you the remainder of the purchase price beyond what you're able to borrow in the form of equity. This works especially well when you are being offered the property below market value.

Check with your lender on this. Back in the day, they all used to allow it, but these days some don't.

As a quick example, let's take a home worth $125k. The seller wants a check for $100k, but is also willing to sell it to you at that price. Rather than structuring the purchase contract around that $100k price and only being able to borrow $80k, purchase it at the full $125k while borrowing 80% from the bank. That gets him his $100k check and it gets you an LTV the lender can live with. You also won't have a payment on a seller held 2nd mortgage factoring into the debt ratio used to qualify you for the loan.

Only real catch here is, it won't work if the property has recently been listed for less than your full purchase price.
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post #24 of 35 (permalink) Old 12-28-2011, 07:21 AM
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I got 52k burning a hole in my pocket. Let's do it!!

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post #25 of 35 (permalink) Old 12-28-2011, 08:00 AM
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Sorry to hear about your Grandmother.

Goodluck with the house.

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post #26 of 35 (permalink) Old 12-28-2011, 08:38 AM Thread Starter
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The option on a seller held 2nd mortgage mentioned by Stanimal is often workable. If you are buying the property from a family member, another option to consider is a "gift of equity", wherein you purchase the property and the seller "gifts" you the remainder of the purchase price beyond what you're able to borrow in the form of equity. This works especially well when you are being offered the property below market value.

Check with your lender on this. Back in the day, they all used to allow it, but these days some don't.

As a quick example, let's take a home worth $125k. The seller wants a check for $100k, but is also willing to sell it to you at that price. Rather than structuring the purchase contract around that $100k price and only being able to borrow $80k, purchase it at the full $125k while borrowing 80% from the bank. That gets him his $100k check and it gets you an LTV the lender can live with. You also won't have a payment on a seller held 2nd mortgage factoring into the debt ratio used to qualify you for the loan.

Only real catch here is, it won't work if the property has recently been listed for less than your full purchase price.
Thanks for the info Troy. I will check into it.

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I got 52k burning a hole in my pocket. Let's do it!!

Just don't let tiff know. Lol
Sorry Oddy I apprecitate the offer but I would never go in as partners on property. I wouldn't do it with a GF I won't do it with a friend.

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Sorry to hear about your Grandmother.

Goodluck with the house.
Thanks Scout
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post #27 of 35 (permalink) Old 12-28-2011, 08:51 AM
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A friend of mine is also in this boat, sorta, outside of the higher down payment, you'll probably also need to show something like 6 months of expenses in your bank account. That's at least what the bank told him. He has now decided to wait another year before buying another house. Good luck on the purchase if you can pull it off.

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post #28 of 35 (permalink) Old 12-28-2011, 09:05 AM
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A friend of mine is also in this boat, sorta, outside of the higher down payment, you'll probably also need to show something like 6 months of expenses in your bank account. That's at least what the bank told him. He has now decided to wait another year before buying another house. Good luck on the purchase if you can pull it off.
This.

I was just checking into another property and the lenders always have stated they prefer to see more in reserves if you are looking for an income/investment property.
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post #29 of 35 (permalink) Old 12-28-2011, 11:16 AM
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Oh I hear ya. But a CLSB pimp pad would be nice.



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post #30 of 35 (permalink) Old 12-28-2011, 11:46 AM
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I think its been mostly covered.

Expect a higher interest rate, required down payment of 20%, required reserves of 6 months or more.

Taxes will be higher, home insurance will be higher, etc. No tax write-offs.

If your grandfather is willing, you can set up a owner supplied mortgage. He in essence is the bank. You set-up a down payment, and interest based mortgage payment with him. He can choose what interest rate he wants (fixed 20 year 4% for example), and you pay the monthly rate.

Since its in family, I would recommend this approach. Less hassle, the rate, downpayment, cash reserves, etc is more flexible. And your grandfather is protected in case you become an asshole and don't pay. (He can foreclose and take back the property) There is also the ability to have the "mortgage" become part of his trust at passing. You would keep paying monthly, and the money would go to the trust and be distributed to his heirs. OR you can get a loan from a bank at that time and pay off the owner mortgage in a lump sum.

Last edited by TripleZ; 12-28-2011 at 11:50 AM.
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