All Forum Posts by: Alvin Uy

Really? I was wondering if HML rates were lower outside of CA.

Im in SoCal...Ive gotten as low as 7.25% 90%LTV (depending on property BPO/credit score/experience). But someone just told me today of a lender that can do 100% LTV at 10%-13% ( with all interest payments paid at sale) depending on what the property BPO. Ive never heard of this until today.


 

If you go to HML route first and refi, I believe you will need to wait for 6mos seasoning before you can refi to conventional loan...plus pay closing fees 2X. HML is a much higher rate too (8-12%) depending on experience. So ultimately, your favorable price savings will be eaten up by your holding interest rate fees + double closing fees. If you try to purchase as "all cash", most sellers agents will require you will still need to show proof of funds... which means you will need to divulge that you are using some kind of HML unless you truly have the cash. So there's no real added value except your ability to close faster and less lender requirements to close (less contingencies).

In my opinion, HML is better used for flipping on properties that are distressed and can't qualify for a traditional loan. Also, its a great option for investors who want to use the least amount of downpayment $$ (as low as 10% depending on purchase price/BPO).... and if you don't want to use your own cash for rehab, HML offers 100% rehab financing for those added value plays as long as there's enough meat on the bone to afford the holding costs.

In your case, if you are planning to buy and hold with 20-25% down and property qualifies with a traditional loan, go straight to conventional 15-30fixed.  Rates are so low now and going to drop lower again soon. I would offer a higher price than most all-cash buyers competing for the same property,  typically the higher purchase price wins the game.  Plus if you are buying and holding, your rehab standards will be different and should afford you to spend less to make up for the overall savings.  

I was just thinking the same thing. Probably going to be tough ...its already tough now.

@Donte Handy

I own several MFs and a 4unit. I use Kwikset Smart Key on all of them. This allows me to have 1 key to open all doors for each unit. Love it! Easiest thing in the world to switch keys out.

Originally posted by @Cody L.:

Originally posted by @Alvin Uy:

Originally posted by @Cody L.:

Originally posted by @Nathan Hui:

I would like to hear from investors who started in 06-07. Are you guys out there? What did you do in terms of investment strategies that protected you from the recession? 

 My first property (8 unit) was bought 7/07. Second property (16 unit) was bought 10/07. I normally don't share this info but here is the stuff I bought just before the recession, during, and just after. I believe all markets have pros/cons. ALL of them. The "pro" back then was cheap property. The "con" was no financing. The pros and cons today are 180 degree different.

 where were these properties located?  where they in CA?

 Nooo.   Houston. And all have more than doubled. Even properties I bought 4-6 years ago have nearly doubled. 

 Thats awesome! Some of my properties I bought in Los Angeles within last 5-9yrs almost tripled. So I can only imagine it doubling the past 5 years in Houston. I had an opportunity to buy in Houston/Austin,TX about 5 years ago... but I was too scared of OOS investing then. 

Originally posted by @Cody L.:

Originally posted by @Nathan Hui:

I would like to hear from investors who started in 06-07. Are you guys out there? What did you do in terms of investment strategies that protected you from the recession? 

 My first property (8 unit) was bought 7/07.  Second property (16 unit) was bought 10/07.   I normally don't share this info but here is the stuff I bought just before the recession, during, and just after.    I believe all markets have pros/cons.  ALL of them.  The "pro" back then was cheap property.  The "con" was no financing.  The pros and cons today are 180 degree different.

 where were these properties located?  where they in CA?

I bought my first 3/2 house in Dec'03.. with 3% down. I guess you can say that was my primary residence. House hacked it to help with payments. My second house which I house hacked again was purchased in ‘09. That one is a 6/4 house that was purchased as an REO...with 20%down this time. I wasnt married with kids at the time so i rented out all 5 other rooms and was Cashflowing $1k a month. I actually ended up keeping this house as my primary to this day but bought several other rental properties.

I started around 2003-04. I house-hacked my first one. In late 2005... i tried to flip a house with a buddy but he decided to buy me out and keep it. He ended up foreclosing on it because of a bad loan when the market crashed. I almost bought it back from him, but I couldnt pull the financing together. Looking back, perhaps luck was on my side i guess. Started again and bought an REO in 2009.

I believe its best to use Helocs as temporary financing.  Im Using it now as Down Payment and rehab money for flips.  Profit from flips is what I will be using towards my buy and holds investments.  


 

 "SINGLE FAMILY"