I found a great post from BiggerPockets.com today. It talks about the lending guidelines that Fannie Mae & Freddie Mac have on Investment Properties. Instead of rehashing the entire article- here’s the gist of it.
Full Documentation: Ideal for borrowers looking for conforming loan amounts who have good credit and assets:
1 unit: 90% LTV / 85% 1st Lien / 90% TLTV - $417,000
2 unit: 90% LTV / 85% 1st Lien / 90% TLTV - $533,850
3 unit: 75% LTV / 70% 1st Lien / 75% TLTV - $645,300
4 unit: 75% LTV / 70% 1st Lien / 75% TLTV - $801,950
Cash Out 1 unit: 85% LTV / 80% 1st Lien / 85% TLTV - $417,000
Cash Out 2 unit: 85% LTV / 80% 1st Lien / 85% TLTV - $533,850
Cash Out 3 unit: 70% LTV / 65% 1st Lien / 70% TLTV - $645,300
Cash Out 4 unit: 70% LTV / 65% 1st Lien / 70% TLTV - $801,950
Not available IO
Stated Income: Ideal for self-employed/salaries borrowers with excellent credit. No tax returns or other written verification of income. Assets are required to be verified.
1 unit: 90% / 90% - $417,000 - 720 75% / 90% - $417,000 - 680
2 unit: 90% / 90% - $533,850 - 720 75% / 90% - $533,850 - 680
3 unit: 80% / 80% - $645,300 - 720 75% / 80% - $645,300 - 700
4 unit: 80% / 80% - $801,950 - 720 75% / 80% - $801,950 - 700
Cash Out 1 unit: 75% / NA - $417,000 - 680
Cash Out 2 unit: 75% / NA - $533,850 - 680
A-minus; Ideal for borrower who don’t meet “A” paper credit standards. Allow borrowers to obtain a conventional product at a slightly higher rate.
1 unit: 90% LTV/85% w/sub. financing/90% TLTV - $417,000
2 unit: 90% LTV/85% w/sub. financing/90% TLTV - $533,850
1 unit:* 90% LTV/85% w/sub. financing/90% TLTV - $417,000
2 unit:* 90% LTV/85% w/sub. financing/90% TLTV - $533,850
3 unit:* 75% LTV/70% w/sub. financing/75% TLTV - $645,300
4 unit:* 75% LTV/70% w/sub. financing/75% TLTV - $801,950
Cash Out 1 unit:* 85% LTV/80% w/sub. financing/85% TLTV - $417,000
Cash Out 2 unit:* 85% LTV/80% w/sub. financing/85% TLTV - $533,850
*Borrowers may not own any other financed investment properties
With interest rates at a low point, and deals flowing from everywhere- this is some encouraging information! If you’re serious about picking up some investment properties, give me a call and we’ll find a great deal for you.
MSNBC had an article a few days ago about the effect of foreclosures on housing prices. There’s not too much new information here, other than reiterating why it’s an excellent time to buy investment property. Check it if you’d like, or here’s a clip.
While foreclosure sales are bad news for homeowners in neighborhoods with high foreclosure rates, they are a boon for well-financed buyers looking for properties at bargain prices. And in broad terms, economists view them as part of getting back to more realistic prices after years of excess.
Alejandro Diaz-Bazan, who sells foreclosed properties in Miami, said banks seeking to unload foreclosed properties are looking for buyers that can close deals quickly, and therefore need to have a hefty down payment. This month, Diaz-Bazan said a European client bought two foreclosed condominiums as an investment.
“The bank really is out to move them, to liquidate them,” Diaz-Bazan said. Despite the downward pressure on prices, he said, “property prices in Miami have not dropped enough” for the market to rebound.
Yup- the smart ones are buying right now. I think it’s been obvious for a while, I’ve certainly been preaching it for a while. It’ll be interesting to see the mass media spreading the message now tho- and how many investors will finally dive back into the market once their news anchors start talking about it. 
Too bad the REALLY good deals will have been snagged up by then… or will they?
Are you maximizing your Return on Investment (ROI) and Cash Flow from your Commercial Investment Property? You can apply Cost Segregation tactics to your Investments and save a bundle on your taxes. Essentially, cost segregation is the process of separating out personal property assets from real property assets for decreasing your tax liabilities. Using a Cost Segregation Study, you can shorten depreciation time frames on certain elements in your property from 27.5 or 39 years, down to as little as 5 to 15 years. This allows you to free up more money now to assist with current tax liabilities, or apply to startup costs or other investments. Wikipedia has a great reference explaining how this all works.
It’s always best to have the most knowledgeable people on your team. I became affiliated with the Lackman Commercial Group largely due to their expertise and extensive background in Accounting. Two of the founding members have been CPAs for many years, and can easily assist applying such techniques when purchasing Commercial Property. I don’t know many other Commercial Agents who can assist with the purchase/listing of your property, as well as provide the highest quality and expert advice in maximizing your financial returns. If you would like to purchase or sell Commercial Real Estate, please contact me to see the benefits you’ll have with the Lackman Commercial Group.
