All Forum Posts by: Andrew Garcia

Hi @Jacob Robinson, welcome to REI!

I want to ensure that you have proper expectations. When looking at those higher-end neighborhoods, the property may not cashflow or it may have minimal cashflow.

The easiest way to research the neighborhoods in a particular area is to get in contact with an experienced and knowledgeable investor-friendly agent.

You can get their thoughts on the neighborhoods that are hot and which ones to avoid.

As you have seen, the higher-quality neighborhoods are higher-priced as well so it may not be the best for an entry investment property.

Alternatively, you can look at other markets. For example, you can get properties in B+ neighborhoods for $200k in many Midwest markets.

I hope this helps! Let me know if I can be of any assistance.

@Emily Beck, hello from MD!

There are a few options.

1. You can get a co-signer then once you get a full-time job once you get out of school, you can refinance to take their liability off their minds.

2. Depending on how much you have saved, you might be able to get a DSCR loan where you are not qualified on your personal income.

3. Depending on how tight your income is, you might be able to request a raise to get you over the line.

No one on this forum can tell you specific workarounds unless they have more information but those are some general suggestions.

Hope this helps! Let me know if I can be of any assistance.

Hi @Joaquin Johnson, it sounds like the STR is the better option.

Whether that be selling and buying multiple smaller STRs or upgrading to a multi-unit, or keeping the current property and transitioning it to an STR.

Please also consider that if you sell and buy new property(ies), you will lose that interest rate that you seem keen on keeping.

Hope this helps! Let me know if I can be of any assistance.

Hi @Hayden Burns, welcome to the community!

Congratulations on purchasing your first property!

If you go to the "Network" tab at the top of the screen, you can type in "Fort Myers, FL".

From there, you can connect with people in your local market.

Just remember, don't spam anyone as the algorithm will block you.

Hope this helps! Let me know if I can be of any assistance.

Hi @Keetaek Hong, there are a couple of downsides.

1. You are not paying down the principal balance so if you sell or refinance, the outstanding principal will be higher. Additionally, if there is a correction, you could be underwater.

2. The payments will increase dramatically once the interest-only period ends.

3. Generally, the rate is higher on IO loans.

I hope this helps! Let me know if I can be of any assistance.

Hi @Masood Amin, when he talks about that, he is referring to bringing on equity partners that will cover the down payment.

They bring the money and you bring the deal.

It is better if you bring some money to the table so the other partners know that you have skin in the game.

As for how to get a loan if you have a down payment, you will want to use a DSCR loan.

This is where you get qualified based on the income generated by the property, not your personal income.

If you would like a referral to a DSCR lender, feel free to ask.

Hope this helps and good luck investing! Let me know if I can be of any assistance.

Hi @Ann Winegar, there is something that you should know when purchasing a duplex or a triplex using conventional financing.

You would need to put at least 15% down on a duplex or 25% down on a triplex or quadplex.

Therefore, if your main barrier to entry is the down payment, an FHA loan might be best for you.

Then, if you want to refinance into conventional later on, you can always do so.

As for the second house, you have options.

1. Use a conventional renovation 5% renovation loan.

2. Refinance the duplex or triplex into a conventional or DSCR loan to free up your FHA and do a 3.5% down FHA 203k renovation loan.

I recommend a renovation loan because you can finance both the purchase and renovations of the property with a minimal down payment.

Then, you can refinance to lower your interest rate and rent it out or sell the property.

You will be able to keep the original mortgage on the first house provided that you do not need to refinance to free up your FHA use.

Hope this helps! Let me know if I can be of any assistance.

Hi @Mickael Castillo, you have a few options.

NACA is a great program but has some drawbacks that you should be aware of, specifically for investment properties. The biggest issue is that they require that you live in the property as long as you have a NACA mortgage. So if you ever decide to move out and make it an investment property, you would need to refinance into a conventional, DSCR, net rent, or some other program. By then, rates could be in the 3s or in the 13s. It's a risk that you have to be willing to take. Additionally, they have stricter underwriting guidelines and lower loan limits. If you plan to live in the property until you die and need the assistance, it can be a good program but for your needs, it might not be the one for you.

I would recommend against Divvy. The issue with Divvy is that rent-to-own is not as favorable to the consumer as you would think. If you cannot actually buy the house, you just gave them tens of thousands of dollars more in rent payments.

There are also options that you have that you might not be aware of.

1. You can get a gift from someone else for the down payment.

2. If you are a veteran, you can use the VA loan with 0% down.

3. If you are looking in a rural area, you can use the USDA loan with 0% down.

Hope this helps! Let me know if I can be of any assistance.

Hi @Orkeem Davis, if you are buying a similar property, keeping it would likely be the way to go.

That is because you are going to have to pay closing costs, realtor fees, and will likely have a higher interest rate.

However, if you take those into account and buy multiple properties or achieve better cashflow, selling might be a good idea.

Hope this helps! Let me know if I can be of any assistance.

Hi @Archie Minkowski, this is really a question for the colleague. Some loans are a 12-month term and if you pay it off early, you still owe the interest for those 12 months even if you repaid the principal in 5 months.

I would work this out with him because 7% is a large sum of money.

Hope this helps! Let me know if I can be of any assistance.