Everything posted by alanand
I have done this sort of thing. I would not recommend investing in businesses. This is much more complex than you realize. I have done this and it is too risky and messy. As far as real estate goes, this could work very well. You need to research this for months. You will need to be able to live with ALL of the negatives. 1. Your custodian has to be fully on board and knowledgeable with managing the investment. 2. hegemony statement about arms length is very correct. 3. Your IRA has to have enough cash to buy the property and pay for expenses. It is very unlikely that your IRA can get a loan. If you can get a loan, The income from the property will not be fully tax deferred. You will have to file a complex tax return. You will have to pay taxes on a portion of the income until the loan is paid off. 4. Your custodian will have to pay expenses out of your IRA. You cannot pay out of your pocket for expenses. 5. you cannot sell your property or any existing rental to your IRA. You cannot live in the property. Any "close" relative cannot live in the property. 6. You will have to get an annual appraisal on the property. The total value of the investment is reported to the IRS. This is an IRS rule. 7. You will have to develop significant cash reserves in the IRA. Can your IRA write a check for a new roof when it will be needed? 8.It will be questionable that you will be able to manage the property. It may not be arms length enough. ...
Tried one lender so far(rocket). they were vague during the denial. They said 680 but 700 would be better. They said it would be great if I could remove all negative information. Really now. I questioned whether owner occupied would be better. They said no. They said I would get about a one percent better rate for owner occupied. Owner occupied would not help approval with them. I did get some odd vibes talking to them. They were oddly concerned why I wanted to put such a large amount down. They said they are using the lowest of the 6 reports. The vibe I got was they did not want to do business with me. I got the feeling I will always be 20 points away. I wanted to be pre-approved for a loan. They were pressing for a specific address. I do not have a selected property yet. Its a tough market for investment property. I called nfcu today. I am eligible to join. Their rate is considerably better. I did not discuss my score with them. They would not quote a score. They did not seem to care about the size of the down. They said it a whole picture of credit history, job longevity, checking history, ... I am debating spending a couple of months trying to get my score up. I have a cc charge off paid in full two years old. Plus some erroneous lates 18 months ago. On the other hand, there is no guarantee I can get those removed.
I tried to get a pre approval for a mortgage on an investment property. I am looking a loan of $140K. I want to put 100K down for a max purchase price of $240k. I am hoping to find a property between 200k and 240k. They pulled my credit and my wifes credit and the low score was 660. Current debt to income is 20%. With the new loan, debt to income would be about 29%. I was told the underwriter would want a credit score of 680 to 700 for a conventional loan. Should I try another lender or is this impossible? or should I focus on improving our scores and wait until I can get a 700 minimum?