Real Estate questions - seeking guidance

[Porsche-O-Phile]

Okay, I'm a semi-regular poster in the other RE threads on this board and although I generally question the sanity of anyone attempting to get into the current RE market I want to be thorough and get as much background information on the process of buying so that if/when an opportunity DOES come along, I'm not losing time trying to figure out what the heck to do.

Here's the background:

I know a pretty fair amount about construction, design and buildings. I am trained as an architect although I specialize in commercial (not residential) jobs. As such, I'm not an appraiser, but I have a pretty decent idea of what some of the "red flag" items on potential properties might be. I'm not saying I'd never hire an inspector, but the likelihood of something getting past me are a little less than Joe Schmoe - let's just put it that way. So that's one in the plus column.

I know damn nearly NOTHING about finance, banking, loans, etc. I'm scared to death if I walk in and say "I'm interested in buying (probably a condo)", the sharks will immediately sense my naivity and rip me to shreds. I'm EXTREMELY distrustful of banks, bankers, realtors and any of the people that typically profiteer off of people just like myself - maybe for good reason, maybe not.

My credit is okay. Not perfect (we went through a pretty bad patch about four years ago, but have done pretty well since), but fair. Getting better daily as past bad experiences (mostly layoff-related) get further and further into the past. Things only improve as time goes on.

So anyway, where the heck do I start? I'm also paranoid about Internet "phishing" scams so I'm reluctant to submit a bunch of personal information to one of those "find-a-lender" or "make-banks-compete-for-your-business" web sites, although I don't want to throw away a potentially good resource too. . . What do you guys think of these places?

Given my druthers I would PREFER to deal with a smaller more personable lender than a big "mega-congloma-corp-co" bank. Obviously best deal controls, but I sort of prefer smaller credit unions or lenders to some "you're-only-a-number-despite-what-the-commercials-say" place. Thoughts? Opinions?

Realtors generally seem cut from the same cloth as snake-oil salesmen and used-car dealers. I know there have to be some decent ones out there, but how do I ask the right questions so as to not get snookered? How do I know if someone is trying to take advantage of me (their lips are moving, I know, I know. . . haha).

I'm horribly uneducated in finance terminology and the like. For example, I think I finally have a grasp on what "points" are. I only recently learned what "upside-down" means. Conceptually I think I'm a reasonably smart guy and can grasp the stuff if I have it explained, but the maze of jargon and terminology makes my head spin - anyone recommend a good book or something to learn how to make sense of all the financial babble?

Some stupid questions:

1. Can you use a mortgage to consolidate/eliminate other debt? In other words, could I take out say a $350,000 loan on a $300,000 place and use $50,000 to wipe out a bunch of other debt like credit cards, car loans, etc. or possibly invest? Bad idea? Is it even allowed? Obviously if we could do that and be left with a mortgage and a student loan payment and that's it, it'd simplify the hell out of things and be a lot better interest-rate wise.

2. If you get "pre-approved" for something, what does that mean exactly? How long is it good for?

3. Who are some of the better (or worse) lenders that people have dealt with? Realtors?



I'm sure I'll have more. Sorry for the long post but I figure I might as well take advantage of this time while I'm sitting around waiting for the market to correct/crash and actually learn how this stuff works so when the light turns green I can just "go", rather than trying to futz around figuring all this stuff out. . .

TIA guys.

[Steve Carlton]

Your best loan is going to be one that's 80% of the purchase price (or appraisal, if lower). No mortgage insurance (MI), or "MI" built into a higher rate. If you can go "full doc" and document your income for the last two years (in the same line of work), and show enough assets in the last 60 days (checking, savings, 401(k), etc), you can get the best loans out there with a 620 FICO score.

Behind that, put a second mortage. A home equity line of credit (HELOC), or a fixed rate second. You can go up to 100% of the purchase price with those.

There are some programs that go over 100% of the purchase price and allow you to payoff consumer debts, but those loans suck, IMHO. As long as you qualify for the home loans and the consumer debt together, I wouldn't pay them off with a purchase money loan(s).

[Dantilla]

A small, local bank will give you better service than a national mega-bank.

Ask friends if they have any recomendations for realtors and/or lenders.

If you lived close to me I could set you up with my realtor. I've bought a few houses to live in, and a few fixer-uppers from her.

[HardDrive]

Can you join any kind of a credit union? They tend to be more consumer friendly.

[RANDY P]

Originally posted by Porsche-O-Phile





Some stupid questions:

1. Can you use a mortgage to consolidate/eliminate other debt? In other words, could I take out say a $350,000 loan on a $300,000 place and use $50,000 to wipe out a bunch of other debt like credit cards, car loans, etc. or possibly invest? Bad idea? Is it even allowed? Obviously if we could do that and be left with a mortgage and a student loan payment and that's it, it'd simplify the hell out of things and be a lot better interest-rate wise.

2. If you get "pre-approved" for something, what does that mean exactly? How long is it good for?

3. Who are some of the better (or worse) lenders that people have dealt with? Realtors?



I'm sure I'll have more. Sorry for the long post but I figure I might as well take advantage of this time while I'm sitting around waiting for the market to correct/crash and actually learn how this stuff works so when the light turns green I can just "go", rather than trying to futz around figuring all this stuff out. . .

TIA guys.

A couple of things before you proceed. Look at the Good Faith Estimate

Note the following - in terms of "closing costs" - in reality the only real fees that are in control of the person writing the loan are as follows:

Origination fee
Discount fee - (this may or may not be real)
Broker fee
application fee
processing fee
admin fee

These fee lines are what the person originating the loan can use to break apart profit - meaning, although they have different names, they all are payable to the same person, therefore are all in the same. These fees are what is needed to be watched.

The other costs that ARE NOT PAYABLE to the person writing the loan, are in fact fixed third party costs which MUST be paid - these are the costs for making the loan legal, and collectable in the event you don't pay. For example:

underwriting fee
recording fees
Title fee
escrow fee
appraisal fee
various county, notary, attorney (depending on state) and tax fees
anything listed under "reserves deposited with lender"

These fees represent real costs that are REQURIED to close the loan.

Underwriting fee is a fee that's payable to the lender for granting the loan.

recording fees are what your local county recording office requires to note in the books that you have a new home under your name or a loan under your name

title fees are what the title company charges to research your legal history - this is required by the lender to prove that you in fact, have no legal obligations (judgements, garnishments, back taxes) that could cause the house to be reposessed while under your ownership. If athe bank grants you a loan, and you have a legal obligation to pay someone, the home you just bought can be taken away and used to pay off your creditors, screwing the bank - so, this is a guarantee that you are "clean" and no higher legal entity (such as the IRS) can take your home away

escrow fee this is an independent party that represents neither you or the bank. They are in charge of trading the banks money for that signed document agreeing you'll pay the bank back for the home you just bought. They are a neutral 3rd party. Requried by federal law to ensure the bank doesn't screw you or you screw the bank.

appraisal fee - a state certified inspector who guarantees the value of the home you're buying - also verifies to the bank that the property does in fact exist and is in marketable condition - he needs to be paid as well.

various county, notary and attorney fees - any other required costs depending on what your local county charges for owning a home.

reserves deposited with lender - when you have your taxes and insurance rolled into your monthly payments - meaning the bank pays your taxes and insurance out of your monthly payments, they collect anywhere from 2 - 12 months worth of taxes and insurance in advance, so when you make your payments, you're always ahead of what you owe. If your property taxes go up, then they have the slack to cover it.

THAT IS NOT CONSIDERED CLOSING COSTS- those are for your taxes and insurance, you can get it back if you ask for it.

EDIT: remember that it is also illegal for someone to mark up and make profit off of a fee that isn't rightfully theirs. So you do not need to worry if you are paying inflated title, escrow, appraisal fees, etc.

Example would be myself the loan officer charging you the borrower $500 for an appraisal that was only $400 - I could not keep the difference. That is illegal.

continued-

[RANDY P]

So, we have established that the 1st set of fees that are payable to the company writing the loan are in fact, negotiable.

As of for the other costs notated in the 2nd set, those are pretty much universal across the board.


How to determine if the loan is useful

1) - the payment. Can you afford it?

2) overall amount of closing costs - with the above knowledge, if there is an excessive / high cost difference in fees when you're comparing offers in the 1st set of fees noted, chances are you are being charged quite a bit. Compare the rate, the length of the loan, and the overall payment, vs. the closing costs.

A low rate is meaningless if you are paying huge origination discount, admin, processing and broker fees to get there.


Once again, between loans, the 2nd set of fees are always required, so that will be a constant. If there is an offer that DOESN'T have that noted, then they are omitting costs that are required, and chances are it's a bogus offer. That, believe it or not, is a common ploy into tricking borrowers that a particular "offer" is better than another.

Getting around that 2nd set of costs is like trying to skip paying sales tax - it simply isn't possible. Those costs are required to certify the mortgage as legal and to protect the bank. No lender in the USA will lend money on a home without adequate precaution - otherwise the loan isn't legal and the bank will lose. In other words, they won't do it without the appraisal, title inspection, paying the required various state and county customary fees.

continued

[RANDY P]

Protect yourself.

Easiest way to shop for the deal -

Indentify how long realistically you'll keep the home. No use insisting on a "30 year fixed" if you know for a fact you'll be leaving in 5 years. Although the 30 / fixed is America's sweetheart, it's also the most expensive loan out there. Consider an ARM if a change in owenership is a possibility in the forseeable future.

Expect higher interest rates and payments if you have less down. Don't be an idiot who thinks that a guy with -0- down is entitled to the same rate as the guy who puts 35% down on a home. Same with credit, bad credit = higher rates. Banks translate higher risk with higher rates. Less you put down, expect a higher rate. Period.

INSIST ON A GOOD FAITH ESTIMATE, AND A TRUTH IN LENDING WITHIN 3 DAYS OF SOMEONE PULLING YOUR CREDIT. This is important. This is a legal, written record of what you were quoted based on your credit, estimated downpayment, and the exact term of the loan. If your loan officer doesn't issue this to you, you in fact have NO written record of what you were quoted and now are open to getting your rate and fee jacked up since you don't have proof of what you were offered. This is serious.

If, after the initial quote, the bank determines they cannot offer you a loan based on those terms for whatever reason, they are to reissue a new good faith estimate and truth in lending stating the NEW terms of the loan before you go into signing. If they do not have your signature on the new estimate before you sign your loan, acknowledging that in fact, you are aware of the new fee / rate whatever, you have grounds to claim "predatory lending" - in simple terms, they never gave you adequate notice that you are not eligible for what you originally were quoted.

This is what protects you from getting your fees or rate raised at last minute. They have to demonstrate they have made a reasonable attempt to notify you PRIOR to you signing docs that you have a new rate / fee whatever due to a change.

Don't assume that a big brand name bank is going to be always better than a smaller brokerage. Bank is one of the WORST places you can get a loan. A competent broker will lay waste to a brand name lender.

A BANK, A MORTGAGE BROKER, AND EVEN CREDIT UNIONS ALL SELL TO THE SAME INVESTORS, THEREFORE THERE ARE NO DIFFERENCES BETWEEN RATES AND COSTS. The actual rates and the fees to get that rate are largely dictated by the investor, so the guy at Bank of America gets basically the same pricing as the Mortgage Broker at Seattle America One Finance . Don't fall for that BS that "were big brand name bank so there's no middleman!!" That is 100% bull$****.

Bank of America for instance always prices their loans with 1% profit from higher rate, and 1% profit from you, the borrower. In other words, they ALWAYS make 2% origination on every loan they write. This is their corporate policy. A broker can do this for less since they don't have to answer to anyone for what they charge - just whatever the guy writing the loan feels is fair.

Remember, it's just a matter who's willing to charge the lesser cost to get that rate.

One last note on fees. - concerning "points" - as much as you can pay the bank points for a lower rate, a bank can pay YOU points for accepting a higher rate.

Ever seen a "free" loan? Those no fee loans that banks sometime peddle? - those rates are so high, that the bank is willing to pay all the fees since they are paying so many points to YOU for the loan. Yes, if you accept a high enough rate, the bank can actually pay some of those closing costs for you.

Great deal if you plan on selling the property in the near future.

Frankly, I'd stay away from the bigger banks, and find a reputable broker in the area who's mature and can qualify you. Check between 2 - 3 brokers, and maybe one local bank and see what fits the best. Don't go crazy shopping every guy in town, remember that they all have the same investors, so all the offerings will be similar. All that shopping pulls your credit scores down too.

Talk to the loan officer, only talk to the guys who sound intelligent, and / or have a good referral.

Good luck

rjp

[RANDY P]

Concerning 'Prepproval"

It's a written statement by the Loan Officer that says you have been checked and are capable of buying the house in question.

It makes the realtors all warm and fuzzy that they are dealing with a serious buyer and not a deadbeat. This can be a problem if the buyer doesn't actually qualify to buy the home he just agreed to buy.

for lenders, all I can say is stay the hell away from Ameriquest, Household, Beneficial retail. If they claim to be from one of those lenders directly, RUN.

Realtor, talk to someone who actually has listings for sale, remember that your agent has to represent YOU, the buyer, not the seller. They should return your calls promptly and do more than simply beat you into paying full price for the home.

Trust your gut feelings, if you feel like you're being ignored and pressured by your realtor, you're probably right. Find someone who will work to represent your best interests, not just someone who wants you to buy ASAP.

The end.

rjp

[RANDY P]

Lastly, pay off debt to qualify -

Typically, a bank will not allow you to pay off bills when you buy the home, only a few lenders and FHA will allow a small amount, typically limited to 3% of the purchase price.

In other words, forget about it.

Really the end this time,

rjp

[turbo6bar]

Originally posted by Porsche-O-Phile
1. Can you use a mortgage to consolidate/eliminate other debt? In other words, could I take out say a $350,000 loan on a $300,000 place and use $50,000 to wipe out a bunch of other debt like credit cards, car loans, etc. or possibly invest? Bad idea? Is it even allowed? Obviously if we could do that and be left with a mortgage and a student loan payment and that's it, it'd simplify the hell out of things and be a lot better interest-rate wise.

$350k on a house worth $300k is not gonna happen. I would not borrow against your house to invest. Getting a loan above the value of the home is not going to be cheap. The interest rate would be really high.

The medicine I advise now is
1) Get your credit report from the three bureaus.
2) Pay all current bills on time.
3) Clean up the credit report
4) The credit report will tell you what factor(s) are hurting your credit score. Work on those areas. For example, if the report says you have too many open credit cards, cut a few up.

There are websites that tell you how to make the biggest impact on your score.

Since this work takes time, you should start as soon as possible. A good credit score will save you mucho dollars in the long run. You get lower credit card rates and cheaper insurance rates on top of lower mortgage rates. Start a slow, but steady effort to pay down debt.

Ultimately, you're shooting for good credit (say 650 or above, 720+ would be nice), manageable debt compared to your income, and at least some money for a down payment (5-10% down would be great). Start saving a few hundred per month for a down payment. Throw it into a high-yield savings account or treasury bills.

[Big Ed]

I'm a real estate broker, so maybe you won't believe what I say. But my lips aren't moving as I type this.

Randy is correct that all lenders sell to the same investors, that is, the lenders who sell. Most communities will have a local credit union or cooperative bank (owned by depositors) that doesn't sell any of their loans, they hold them all in house. In my experience, these are the guys with the lowest rates and fees, and that's where I get my personal loans. The catch? They are typically very conservative lenders. As Randy suggests, make sure you review the good faith estimates and loan APR (not just note rate) to compare apples to apples.

I am dead against using your home to carry other consumer debt. Please don't do that. In your example, if you borrow $350K on a $300K residence you'll get an awful awful loan. And god forbid you come upon financial difficulty, you are better off having other consumer debt separate (you can choose to pay the home loan FIRST). I can't tell you how many people I've talked to in the past year who now owe 50% more on their house than they paid for it 4-5 years ago....anbd not because they have improved it, but because they paid off credit cards, car loans, etc. MULTIPLE TIMES. Now they are interested in selling, and I have to tell them that the place is no longer worth what they owe.

A preapproval simply means that they have run a credit report/score, and based on a quick interview of you for items like income, etc. you meet the lending criteria. These are generally "good" for 90 days or so, but in my experience they are only as good as the lender they are issued by. Certain companies letters are not worth the paper they are printed on....again, the smaller, local banks are more reliable.

And the best way to find a broker or lender? Referral from someone you know who has worked with them. Nothing else compares.

[GDSOB]

Another realtor talking here. Jeff, since you know about commercial property, why don't you look at some smaller commercial investment opportunities. You will probably need more cash up front, but they tend to be a more stable long term investment. Don't rush into anything, and make sure you really understand the fundementals of what ever you invest in. RE investment has big rewards, but can bite you big time if you make the wrong decision.

Get to know your local community banker well. They are more flexible in their lending practices and often will make exceptions based on their relationships with you. Your local bank president can probably recommend a good RE Broker to you, specific to your needs.

[Steve Carlton]

Randy P has done an excellent job outlining things here. Some added thoughts:

- I very much agree with getting a loan fixed for how long you need it to save on rate. Lately, the 3, 5, 7, and 10 year fixed rates haven't been much less than a 30 year fixed, unfortunately.

- paying points can be a good thing. For example, on a 30 year fixed, if you pay 0.375 points to bring down the rate 0.125, you'll pay yourself back in roughly 3 years and have many more to actually save on interest.

- less reputable lenders will abuse the Good Faith Estimate (GFE) in a "bait and switch" kind of way. Remember, the operative word is "estimate." Many times, by the time you find out the bad news, it's too late to go to another lender.

- I wouldn't let anyone you're talking to pull your credit report, as your score will drop somewhat as a result. If you haven't gotten a free credit report in the last year, you can get all three at www.annualcreditreport.com , a legitimate source set up by the three major bureaus. I'd suggest getting all three reports, and pay extra for the score. Make whoever you're talking to use your scores to avoid inquiries until you've chosen your lender.

- I didn't see title insurance in Randy P's list of closing costs. Owner's title insurance is probably going to be $2-3K in CA, lender's title insurance will probably be less than $1K.

- Many of the fees Randy listed are negotiable as far as who pays them, but that all factors in to the sale price ultimately. In fact, you can inflate the sale price a little and have your seller credit you all the non-recurring closing costs (NRCCs), usually up to a limit of 6% of the sales price. As long as an appraiser can bring in a slightly inflated sales price, you've effectively financed your closing costs. (Taxes and interest don't count as NRCCs).

[Porsche-O-Phile]

Thanks for the info guys I appreciate it and sorry for being so financially obtuse. I admit I know nothing about "the system" and deal more with design & technical issues than the real-estate side of things. Time to learn it I guess. . .

As far as commercial property (although it pertains to residential too) one VERY limiting factor is the "money up front" thing. I don't have much of it at all, unless you count 401K and investments. I'm not so sure I'd want to raid those for a RE venture although OTOH maybe it would make sense if the return rates were higher. Side note: one of my 401K funds did DAMN well last year, yielding a 30%+ return. Maybe it'll sustain it, maybe it won't, but I doubt I'd be in a hurry to pull money out of THAT and plunk it into a volitile RE market. . .

Anyway, it seems that the state of the current market is very much that if you own property, you're fine. You can sell and take the amount you've made (or a portion of it) as a 20% down (or more) towards a newer, larger place with a very favorable loan. For someone like myself that has never owned, coming up with 20% of a $400,000 or $500,000 place is simply out of the question. If we cut EVERYTHING out of our lives except bills and bare necessities we MIGHT be able to save $10,000 a year - let's face it, cost of living is going up and inflation is on the rise no matter what the skewed government numbers say. Even at that rate, you're a full 8-10 years from getting into a place and by then the "point of maximum opportunity" to get into the market will be long past and prices might be even higher (necessitating more down payment, etc.)

Ideally I want a compromise between a "good" loan and being able to get in at the right time. I'm betting that in the long run it's more advantageous to get in at the right time with zero down or 5% down than it is to get in at a bad time with 20% down. If I can get a zero-down loan or a 5% down loan and just deal with the less-than-ideal loan terms for 5-10 years until the next cycle comes around I can simply refi with the equity I'll then have and be able to switch into a much more favorable loan. In that regard, I've at least made my "housing cost" money count for something other than making a landlord rich.

I'm not too eager to rush out and do that right now though - there are a lot of people in zero-down loans or minimal-down loans right now that are going to lose their shirts on a correction. This is (I'm estimating) in the 2-3 years out type of range although it could be sooner depending on how quickly the market crashes or deflates.

What do you guy think of those "make-lenders-compete-for-you" web sites? Good resource? Bad idea? Phishing scams? Not worth the risk?

[Big Ed]

Originally posted by Porsche-O-Phile
What do you guy think of those "make-lenders-compete-for-you" web sites? Good resource? Bad idea? Phishing scams? Not worth the risk?

Stay away. Work with someone locally so you can converse with a real person. It DOES make a difference.

[RANDY P]

Originally posted by Big Ed
Stay away. Work with someone locally so you can converse with a real person. It DOES make a difference.

Ditto this -


It's great, if you want to get called 30x a day for 6 months straight..

Those are lead generation companies that sell your info to whomever pays them.

rjp

[Steve Carlton]

Jeff- if you get an 80% loan-to-value (LTV) 1st loan, hopefully it can be as good as is available. Sounds like the second loan is the one that will suffer. Instead of saving up $10,000 per year, just use that to pay down the 2nd and get it out of the way. It's my feeling that long term rates are only going up, and refinancing your 1st later will probably be with less favorable pricing.

In addition to a 0-5% down payment, you'll have your closing costs to come up with in addition to pro-rated interest, taxes, and one year's worth of homeowner's insurance. You can structure the deal so the seller pays your non-recurring closing costs in full, saving you thousands to close the deal. You might also be able to be creative and get some down payment back after close of escrow.

[jyl]

This is a really useful thread for me too. Thanks to everyone who's responding, and to P-O-P for starting it.

[Porsche-O-Phile]

Originally posted by Steve Carlton
Jeff- if you get an 80% loan-to-value (LTV) 1st loan, hopefully it can be as good as is available. Sounds like the second loan is the one that will suffer. Instead of saving up $10,000 per year, just use that to pay down the 2nd and get it out of the way. It's my feeling that long term rates are only going up, and refinancing your 1st later will probably be with less favorable pricing.

In addition to a 0-5% down payment, you'll have your closing costs to come up with in addition to pro-rated interest, taxes, and one year's worth of homeowner's insurance. You can structure the deal so the seller pays your non-recurring closing costs in full, saving you thousands to close the deal. You might also be able to be creative and get some down payment back after close of escrow.

Whoa, you lost me there. . . How would I get an 80% loan-to-value first loan? The problem is coming up with a 20% down payment - that's a helluva lot of money and it would take a LONG time for us to come up with that - 10-15 years maybe. By that time, what's the point?

Anyway all I'm propopsing is a way of getting around the 20% barrier-to-entry, which is prohibitive. I'd also like to do it without taking an interest-only or ARM "sucker loan". That's why I'm thinking come up with what is reasonable to sock away in the next couple years (maybe 5%-ish plus costs as you mention) so at least there's something to put down on it. Pay on that for a few years and then when the time is right use the equity or sale to move into a more favorable (80%) loan by refinancing.

Or is there a better way? Simply saying "come up with 20%" is easy to say but damn near impossible to do in practicality, even with aggressive saving. Like I said, we MIGHT be able to save $10k a year give-or-take, but that's still 8-10 years to get into an entry-level place at $400k to $500k now (maybe a little less if the market corrects, but it would still take a long time).

I tend to believe that the "when" is more important than the "how" of getting in. I'd rather get in at the most advantageous time (bottom of the crash) than wait and buy well into an upswing with a little more down. I could of course be talked out of that belief with examples, but I tend to think one could (if they timed it right and bought at the proper time) easily offset any disadvantage of being in a slightly less favorable loan because of not having a full 20% to put down initially.

If this sounds like speculation, it sort of is, but with the caveat that I'm certainly waiting until the market deflates - nothing short-term whatsoever. I think the market is still extremely overvalued and volitile right now. I also would be planning on staying there as long as it took, not trying to "flip" and make a quick buck. I view it as a long-term investment.

[GDSOB]

Let me know when we hit the bottom of the market so I can buy low too...

Seriously, if you are looking for a place to live, you probably already know what you want to buy, even if you can't afford to get in right now. You might want to do what investors used to have to do: "find a deal". As the market softens there will be alot of "don't wanters" who need/want to get out.

Find a neighborhood were you want to be and get the word out that you want to rent/lease/or land contract with intent to buy. Study up on creative financing. Learn how lease options/ land contacts/ subject to mortgages work. You know how much you can afford on a monthly payment, a lot of owners will want that for their vacant property that they can't sell. You have immediate cash flow to offer them. I bet you can find several "investors" begging to get out in a down market. Once you are in a property for a year than you can refinance into your name, eliminating the downpayment and hopefully getting a good rate.

I'd only suggest this for the longer term deals, but these methods work well if you know what you are doing. Structure it right and you will get the tax advantages of ownership too. Sorry about the brief answer - don't have much time today.