Talked to Rocket Mortgage recently........

70 Replies

Originally posted by @Martin Grizzanti :

You can find hard money for 12% and 2-- You just really have to make it happen. Do not give up.



@Martin Grizzanti: Thank you for the motivating message ! 

 

Originally posted by @Marvin Meng :

I agree with you that the price for entry in real estate is high. I would've never been able to had I needed 20% (the norm in my area). I was able to take out a home equity loan which I used for the down payment on my first rental, then refi that one to buy the second (now known as a house hack). I don't know your situation but options you might have (assuming it's a great deal) would be to use equity in your home and/or a 401K loan. 

But please make sure it's a good deal! That we you can refi/cash out and be on your way to your next deal with more options than you have today. Good luck (and congratulations on getting started)! Don't give up! 

@Marvin Meng Thanks for your honest reply. That sounds like something to consider. We have 100% equity in our home now. I will have to check into that. Never did a home equity loan or refi. So it is all a learning experience. I just want to be careful and not get burned ya know. I appreciate your help and motivation!

 

Originally posted by @Dale Miller :
Originally posted by @Marvin Meng:

I agree with you that the price for entry in real estate is high. I would've never been able to had I needed 20% (the norm in my area). I was able to take out a home equity loan which I used for the down payment on my first rental, then refi that one to buy the second (now known as a house hack). I don't know your situation but options you might have (assuming it's a great deal) would be to use equity in your home and/or a 401K loan. 

But please make sure it's a good deal! That we you can refi/cash out and be on your way to your next deal with more options than you have today. Good luck (and congratulations on getting started)! Don't give up! 

@Marvin Meng Thanks for your honest reply. That sounds like something to consider. We have 100% equity in our home now. I will have to check into that. Never did a home equity loan or refi. So it is all a learning experience. I just want to be careful and not get burned ya know. I appreciate your help and motivation!

 

 

Please don't take just my advice on house hacking - there are risks (I'm sure you're aware). But BP has tons of podcasts on it. But if you've got 100% equity, I'd say you have great BRRRR options. Keep posting how this progresses please.

@Dale Miller that’s just how it works for rental property with hard money lenders. If you don’t live there you need to put 20% down.

Maybe a house hack would be a better plan for you. Buy a duplex. Live in one unit and rent out the other. Some banks will tear that differently since it is your primary residence.

@Dale Miller

Hi Dale, just a thought, why not move to a different market? Your 40k may not seem much in the market you're looking at but in a rural market where fixer uppers are selling for 30-40k this is far more significant. Find the right deal in those markets, and pair with a hard money lender for the rehab. Then cash out refinance (BRRRR) at the end of the rehab once you've rented it out. You could scale up your rentals as your develop a track record.

Originally posted by @Dale Miller :
Originally posted by @Peter Walther:

Dale, I recommend you join a local real estate investors group where you can exchange ideas with other investors in your area.  If the deal you have makes sense you might even be able to find someone to partner with or a mentor to walk you through your first deal or two.  I just looked at Meetup for Tonawanda, NY and see about 19 different groups under real estate.  Good luck to you.

@Peter Walther I think that is a great idea. It would lower the anxiety going through the first deal and limit some mistakes if I had a mentor or someone to answer questions. Thanks @Peter Walther 

 Your welcome

Originally posted by @Dale Miller :
Originally posted by @Peter Walther:

Dale, I recommend you join a local real estate investors group where you can exchange ideas with other investors in your area.  If the deal you have makes sense you might even be able to find someone to partner with or a mentor to walk you through your first deal or two.  I just looked at Meetup for Tonawanda, NY and see about 19 different groups under real estate.  Good luck to you.

@Peter Walther I think that is a great idea. It would lower the anxiety going through the first deal and limit some mistakes if I had a mentor or someone to answer questions. Thanks @Peter Walther

 I meant You're welcome

 

@Dale Miller Covid 19 changes the game dramatically. Lenders still remember 2008 and they’re playing the current situation like that...25% down right now (really, since about March 15th) is stable stakes just to play. If that’s outside the comfort zone, then it’s time to stay on the sidelines.

For the record, I’m on the sidelines for the next 60 days, or maybe longer. Depends how May rent collection turns out.

@Odie Ayaga

Is there any good deals in NJ right now ?? I own two properties and been looking to purchase more but everything is priced WAY above market.... where are the good deals anymore or which market can you get fixer uppers for 40-50k??

@Anthony Liguori not my area of expertise, but my experience is that there's deals everywhere it just depends on what you're looking for and how you're looking for it. There's some places where there's properties in that range, but they might be tough neighborhoods or require a hefty rehab (or both)

Originally posted by @Marvin Meng :

Please don't take just my advice on house hacking - there are risks (I'm sure you're aware). But BP has tons of podcasts on it. But if you've got 100% equity, I'd say you have great BRRRR options. Keep posting how this progresses please.



@Marvin Meng: I think I have good BRRRR options also. but not sure which way to go on financing if Heloc or Hel or cash out Refi is they way to go  and which interest rate is better and lowest fees. Sure I will let you know how I am doing with the decision but not getting very far at the moment

 

Originally posted by @Dave E. :

@Dale Miller that’s just how it works for rental property with hard money lenders. If you don’t live there you need to put 20% down.

Maybe a house hack would be a better plan for you. Buy a duplex. Live in one unit and rent out the other. Some banks will tear that differently since it is your primary residence.



@Dave E. I hear ya. If I was younger and single house hack would definitely be the choice. Definitely looking for a duplex.

 

Originally posted by @Anthony Thomas Hager :

@Dale Miller

Hi Dale, just a thought, why not move to a different market? Your 40k may not seem much in the market you're looking at but in a rural market where fixer uppers are selling for 30-40k this is far more significant. Find the right deal in those markets, and pair with a hard money lender for the rehab. Then cash out refinance (BRRRR) at the end of the rehab once you've rented it out. You could scale up your rentals as your develop a track record.



@Anthony Thomas Hager There are properties under 150k in my area but they aren't many to choose from. I hear ya about analyzing a less expensive market. BRRRR is what i'd like to do. Thanks

 

Originally posted by @Nick Barlow :

@Dale Miller Covid 19 changes the game dramatically. Lenders still remember 2008 and they’re playing the current situation like that...25% down right now (really, since about March 15th) is stable stakes just to play. If that’s outside the comfort zone, then it’s time to stay on the sidelines.

For the record, I’m on the sidelines for the next 60 days, or maybe longer. Depends how May rent collection turns out.



@Nick Barlow: I'm trying understand if a HELOC or home equity loan is the way to go to use that to fund the rental property. I'm always on the sidelines and I just hope and pray I can be put in the game someday

 

Originally posted by @Odie Ayaga :

You can get hard money loans with 0% down, but if you're looking for conventional loans you're generally looking at no less than 20% down



@Odie Ayaga: I hear ya. The ideal situation would be to get a loan that allows me to put 10% or less. The best scenerio would be able to put 3% down for FHA but this would be the second home.

 

Hello Dale,

I am in the same boat as you. First time trying to purchase a home with as little down as possible. I have analized over a hundred deals nad have 3 on my top list to go after. I have contacted rocket mortgage, better mortgage, and quicken loans and they want all of my saved money for the 25% down payment. After reading the answers on your thread I have reached out to my local credit unions and am still waiting for a response. I am still unaware if we should be making offers on these properties contingent on us getting financing? Plus the loan finding seems to be the hardest for me than finding the rest of the team because we are new and do not have any history with a bank or lender. I am at the same step you are on this journey and just remmebr that we have to take out all of the emotions out of the dealing with all of this even the brutal honest advice from some of the seasoned veterans. Keep going 1 more step to our financial freedom!