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turning my home into an income property?

Posted by fallingwaters (My Page) on
Thu, Apr 17, 08 at 12:45

i posted about this over on the buying and selling forum,,but this may be a better place to learn about this subject.
i have a ton of equity in my home,which has a basement apartment that already pays half of the monthly mortgage,taxes and insurance. i no longer wish to live in the house and could easily rent out the main house plus the apartment for way more than the monthy nut.
but,,i've been a stay at home mom for most of my life and therefore do not qualify for a standard loan with which to purchase my new home. so--how do i turn my home into a business from which i can create tax returns and borrow against for my new home? yes,,i know a lawyer will give me the specifics,,but i'd like to be armed with as much info as possible when i get there.

Follow-Up Postings:

RE: turning my home into an income property?

I sincerely doubt if you could get a home loan to buy a new home just dependent upon the rental income from your other house. I doubt if they would consider it a secure source of income, as renters come and go, apartments sit empty until another good renter is found, renters too can have bad luck, and not be able to pay their rent, or pay it consistently on time. What you would really be expecting a bank to do, would be to consider the credit rating and employment of the renters...something I am sure they would not and could not do.

I'm sorry, I just don't see it ever happening without the buyer (you) having a steady and reliable source of income.

Sue...just my 2 cents and I could be wrong....

RE: turning my home into an income property?

Hi Fallingwaters,

You're trying too hard to figure out the solution to your problem, and adding too many assumptions that are throwing you off in the wrong direction.

There are a myriad of ways to get you into a new home with structured leverage/mortgage... and trying to create a formal company from scratch merely to create tax returns is probably the most difficult and expensive way you could have wildly imagined.

INSTEAD, I recommend you seek out a good mortgage planner, preferrably one who's done a lot of work with self-employed people. A mortgage planner will know how to start from the big picture and put the various pieces of the puzzle into alignment so that you can get whatever choice of new home you want, financed in a way you can safely afford.

Good luck!
Dave Donhoff
Strategic Equity & Leverage Planner

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