All Forum Posts by: Andrew Garcia

Hi @Mia Tam, you should always shop around.

The title company might be determined by the seller depending on where you are.

Make sure the home inspector has good reviews and knows what they are talking about.

As for the mortgage, you should shop with 2-3 different lenders. To properly shop, make sure you get rate quotes on the same day as rates change daily. Then, you will want to ensure you give each lender the exact same information. Finally, you want to ask for “par rate”. That means you will not pay any points to buy down the rate.

You do not need to fill out an entire application to get a rate quote. The lender only needs to ask you a few questions. You have 45 days from your initial credit pull to shop around with as many lenders as you would like without it hurting your credit.

As for dual representation, there are a few issues that you might run into. The seller has a fiduciary duty as the seller's agent to try to sell the property as high as possible and they are incentivized to do so. They also are not allowed to share confidential information that the seller told them, even if you should know it as a buyer.

These fears can be somewhat alleviated if you ensure that you are working with an ethical agent that has your best interests at heart.

Red flags for an agent include but are not limited to:

1. Not returning calls, emails, or texts.

2. Not being knowledgeable about the area.

3. Waiting for you to send them houses you like rather than determining your goals and taking steps to achieve them.

4. Not knowing about your scenario specifically and always searching for notes to remember who you are.

These are just a few; not an exhaustive list.

As for the forums, you are on a great forum right now! Feel free to connect with people on here and ask them questions.

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

Hi @Derrick Johnson, the biggest issue I have seen is that you typically need to pay in full within 24 hours of winning the property at auction. 

Therefore, you will either need to pay cash or have a liquid source of funds available.

Be sure to get this lined up before you start placing bids because you will not be able to get conventional financing this way.

As for REO properties, time is the biggest issue.

You might make an offer today and not hear back for a year. Then, if the bank accepts it, you might not have the funds to buy it.

However, if you can pull off either of these strategies, you will be getting properties at deeply discounted rates.

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

Hi @Jamie Spicer, I got into real estate when I was 18 as well!

I was on the lending side of the business, however.

It can be tough but incredibly rewarding. 

What do you want to do in real estate? Do you want to be an agent, lender, escrow officer, property manager, or investor?

That will help us direct you.

Hi @Kyle Smith, as Erik said, DSCR is likely out of the question since most have minimum loan amounts of 75-100k.

You could use conventional financing but if your debt-to-income ratio is tight, it might be tough.

You could look into private lending but rates are typically higher and terms are shorter.

In short, if you can qualify for conventional, go that route. If not, private lending is likely your best option. 

Alternatively, you can buy more expensive properties while getting the same yield by looking into 2-4 unit properties, looking in nicer areas, etc.

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

Hi @Juan David Maldonado, this sounds like a potential seller financing deal.

Work with an attorney to draft up the contract and legal documents.

Additionally, you might want to look outside of local banks and credit unions as those are typically "relationship-based".

A lender that specializes in mortgage loans such as a mortgage broker or a national mortgage bank should have some products that fit you.

Since it is in some need of TLC, a renovation loan might be best for you.

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

Hi @Rosemary Thuo, if you are asking about legal structure, you should talk to an attorney.

If you are talking about splits, workload share, etc. then the BP community can help you out.

Each partnership is unique but if you share a bit more about what you are bringing to the table and what they are bringing to the table, the community should be able to help.

Hi @Michael Baldus, I have to agree with Aaron. 

Check in on them and don't try to steal their house. Neighbors talk so you could get a bad reputation in the neighborhood if you low-ball them.

Wishing you the best of luck!

Hi @Hans Schubert, that's great that you want to get into real estate full-time and are taking steps to get there!

You can find weekend work in pretty much any area of real estate.

Whether that be on the agent side, lending, title and escrow, property management, wholesaling, or working for an investor.

Any of these would be good options for you but some are going to be more stable, W2-type jobs and others will be "you kill what you eat" while getting some experience.

With your background and ambition, I have no doubt that you will be able to find something that suits you.

There is also a "Jobs" area in BP under the "Network" tab. Feel free to explore there as well.

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

Hi @Tammy Ginsburg, they are good in that they generally are cheaper and require less work.

However, the HOA fees can oftentimes kill the cash flow. In addition, not all condo associations welcome investors with open arms.

They also see lower rates of appreciation compared to single-family.

The amenities also offer great magnets for prospective tenants.

On the other hand, the tenant pool is generally smaller for condos.

I would contact a local investor-friendly real estate agent that is familiar with condos and they can likely guide you on which projects to avoid and which ones would be solid investments.

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

Hi @Account Closed, hello from MD!

A cash-out refinance is good if you are going to put the money in long-term assets or are going to deploy a large sum of capital. For example, if you are buying another rental, this might be the best avenue.

This is because it is a fixed-rate fully amortizing loan with generally low rates.

A HELOC is a good option if you plan on using the capital in the short term and will pay it back. For example, financing the renovation of a property and then doing a cash-out refinance in 6 months to pay back the HELOC.

This is because it is generally a variable-rate loan with interest-only for the first 10 years. The interest rate will initially be lower since it is a variable rate and the payments will be lower since you are paying interest-only.

As for the mortgage interest, you can only take it on the HELOC if you are buying, building, or making substantial improvements to the home in which the HELOC was taken out against.

Either way, it would not minimize the rental property taxes as the mortgage interest deduction on Schedule E is only for loans against the rental property.

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