Interesting NEW Investor Problems

6 Replies

Hello BP,

I'm Cobe with an accidental experience with real estate with my first purchase. I have been researching, reading, and watching alot youtube videos on different ways of Realestate investing. I am currently in the military stationed overseas in Korea planning my next move when I get back to the states next year. Heres a backdrop on my situation.

1) I bought my first house in 2014 not knowing what my intention was other then that was the smart thing to do (haha). I purchased it brand new with a FHA LOAN at $160,000. Soon later I lost my job and filed for Chapter 7 to keep the house.

2) The value price on the bankruptcy for the house in 2014 was at $161,000. I recently had a local agent do a comparative market analysis which gave me a LOW $175,000 AVERAGE $183,000 and HIGH $200,000 as of now.  Since there is some value on this property I want to borrow money against the house like i.e. cash out refinance and use it to purchase another single family property or small rehab purchase to rent it out. The scenario/concern I face is since I did a bankruptcy do I qualify to tap in the property equity of high end $40,000 that has grown in it to even refinance.

4) When I get back to clean the house in the Texas, I don't plan on selling it but renting it out while I'm still in the military. I plan on using the VA loan at my next duty station in WA to purchase another single family property because I do have a family. I haven't seen any multi-family for the value range I'm considering. Sheeeeesh the market is VERY MUCH different from Texas to Washington State! This would be my first attempt to use it btw, but never the less I was considering on doing some real-estate investing in the Seattle area if possible with the cash out from my 1st property.

Im open to suggestions, if the first scenario is doable before reaching out to different sources?

Thank you for taking the time read fellow BP's!

@Cobe Mouton . Thanks for your service. Enjoyed my time at Kunsan, Korea.  Sorry to hear about your earlier financial difficulties.

This is pure opinion, based on near 30 Years experience in Residential Real Estate. Your bankruptcy was in 2014, so the normal clean credit time is typically 7 years after the bankruptcy is discharged - whenever that might be! Can you get a loan sooner - definitely YES. I don't think Lenders will be clamoring to loan your money for investment purposes for a few more years. Can you get a VA Loan for a personal residence - I would think so!

My suggestion is to visit with several Lenders, put ALL the cards on the table, including the crappy ones, tell them what you would like to do, and ask if they can see a way to help you.

Good Luck!

Jim, thanks for the heads up thats good to know. Great insight! 

Originally posted by @Jim Cummings :

@Cobe Mouton. Thanks for your service. Enjoyed my time at Kunsan, Korea.  Sorry to hear about your earlier financial difficulties.

This is pure opinion, based on near 30 Years experience in Residential Real Estate. Your bankruptcy was in 2014, so the normal clean credit time is typically 7 years after the bankruptcy is discharged - whenever that might be! Can you get a loan sooner - definitely YES. I don't think Lenders will be clamoring to loan your money for investment purposes for a few more years. Can you get a VA Loan for a personal residence - I would think so!

My suggestion is to visit with several Lenders, put ALL the cards on the table, including the crappy ones, tell them what you would like to do, and ask if they can see a way to help you.

Good Luck!

 

David yes indeed I do plan on taking advantage of it.... especially since the they (the VA) open the flood gates on loan amount considering all the requirements that must be met of course.

Originally posted by @David Pere :

@Cobe Mouton The VA loan is a very viable option for real estate investing!

 

@Cobe Mouton  

The issue that you will run into as far as getting some of the equity out of the home is the max. LTV that the loan program allows? Even if your current appraised value is $200,000.00 most conventional and government loan programs will allow an LTV of 80-85% as a owner occupied cash out and between 75-80% cash out as a non-owner occupied loan. You can get a HELOC for 90-100% of your equity if its owner occupied or up to 70-80% if its a rental, assuming your credit meets all the guidelines on these loans?

Fannie Mae is the toughest after a bankruptcy in that you must be 4 years out since the date of discharge. The rest of the conventional and government loans will go down to 2 years since discharge. The portfolio loans can be done 1 day out from discharge. 

So you shouldn't have an issue with the time since discharge of the bankruptcy, but you will have an issue with getting enough cash to do what you hope to do with investing, considering the max. LTV guidelines?

I hope this info helps?