All Forum Posts by: Ashley Cross

Conventional financing will follow Fannie/Freddie guidelines which is 6 months seasonings. Something to consider is the ARV. If the property only needs cosmetics repairs, will the ARV be high enough to support a cash-out refi?

Look into a DSCR loan. That program solely focuses on the performance of the property. The rent will need to exceed the PITI.

That's not true. I'm still getting clients pre-approved for FHA loans with 3.5% down for 3-4 units. @Remington Lyman We closed Scot’s quad with a FHA loan at the end of December. 

For FHA 1-4 units, the down payment requirement is 3.5%. Keep in mind, with 3 and 4 units the property will need to pass the sustainability test. For conventional, the minimum down payment for a duplex is 15% and 20% for 3 0r 4. Speak to another lender that works with investors/house hackers a lot. Banks may have portfolio products that allow lower down payment options.

Hi Christian!

Only government loans require owner occupancy. Conventional loans can be used for non-owner occupied properties. That will typically be the cheapest debt you can find compared to hard money and DSCR options. Your only pitfall is if the home is inhabitable. You'll need the green light from an appraisal to get a conventional loan. Your best bet is talk to a conventional lender to ensure you're pre-approved. At the very least, you want to be sure you can refinance after you use a hard money loan if you plan to keep it.

That's spot on. Lock it up asap before it goes up even higher. 

Hello. I've actually been in the same predicament. You really have to consider your goals for your portfolio as a whole. If your goal is to create long term wealth, it makes sense to have the least amount of capital in the deal as possible so you're able to purchase more properties. If your goal is to supplement your income now, then you want to cash flow as much as possible. If you're in the real estate game for the long run I would proceed with the BRRR. My thought process is with less capital in the deal your ROI will be higher and you can always raise rent in the future to increase your cashflow. Best of luck to you.

Hey Jordan! I think its important to first firm up your ARV. $170k to $200k is a huge difference that will be the difference in you making money or losing money. Your exit plan is also important. If you're a looking to flip the property, you'd want to be sure the updates and materials used are comparable to whatever comparable homes you are using for your ARV. If you plan to do a BRRR you'd want to look at comparable rentals as well and make sure the property will cash flow. Once you get the ARV a good rule of thumb is to remain at or below 70% of the ARV for the purchase price and renovation. 

With you being a salaried employee transferring to a job in the same industry, you'll be fine. It would only be an issue if you were making a change of industry or switching to be commissioned. 

Buy real estate and wait. Don't wait to buy real estate! A househack is less risk and a great way for an unexperienced investor to get their feet wet. Go for it!