All Forum Posts by: Brittany Minocchi

Hey @Elijah Berg! I can't help in NY, but I wanted to give some  general info: 

1. Are you planning to buy properties that are in need of rehab? That's where ARV comes into play.

2. Whether or not you can use rental income to qualify depends on how much experience you have and what type of loan you are getting. 

3. You can have up to 10 conventionally financed properties as long as you otherwise qualify (you may run into issues with DTI before you hit 10)

4. You can do this by refinancing or changing the deed, but be aware that changing the deed could cause the loan to be called due. No way to know for sure if it'll happen, just be aware of the risk. 

5. Some do, but most lenders do not service their mortgages. 

Quote from @Joshua Nitcholas:

Question regarding the Cash out refinance... it may be a rookie question, I'm new to all this. in the above scenario, when he goes to get a cash out refi, and they give hime 75% of the ARV, what happens to the other 25%?

Thank you.  

It remains with the property as equity. :) 

Quote from @Anthony Jacques:

I don't think house hacking, at this point due to my family situation would be the best idea but I appreciate the idea! 

Regarding the other types of loans, based on your explanation the conventional loan seems to (on average) have a lower down payment but takes into account the normal loan factors whereas the debt service loan doesn't but with a slightly higher down payment, proof of income generation through the property, and never being able to live in it. A few questions on that 

1. Can I occupy the property if, say 20 years down the line I manage to pay off the loan (regarding debt service loan)?
2. Can I occupy the home using a conventional loan at any point?
3. This one is a bit more involved and I might make a separate post to get more feedback:
Let's say before I purchase any house, I have a combined DTI with my wife of 13% (Assuming gross income is used to calculate DTI). Let's say we use our combined income to then purchase a property we will live in and NOT rent out for at minimum 4 years, potentially 8. Our DTI is now 32%. Now in this scenario I may have maybe $10K to $20K for both a down payment (on an actual rental property which I will rent out) and repair/CapEx/Vacancy costs. I can either
A) Attempt to get a loan with that amount of money, with a 32% DTI OR
 B) Drop my combined DTI to 22% and having about $50K but this would mean waiting until 2029. 
Overall question: is it worth to start now and get into the game or wait a few years?

1.  If the mortgage is completely paid off, yes 

2. If you finance a property as in investment, whether conventional or another type of loan, you can’t occupy it legally. You’d have to refinance to a different type of loan. 

3. Me personally, I wouldn’t wait. Now people will say “of course you’d tell someone that, you do mortgages”…I also have a conscience and want to be able to sleep at night haha. Reason being, there is a cost in waiting. If it’s now vs 5 years from now, that’s 5 years of potential equity you’re missing out on. I don’t have a crystal ball and neither does anyone else, so we don’t know where rates or home prices will be exactly. However, look at the data trends over longer periods of time (say 10 years) and you’ll see that while there are ups and downs, real estate trends upwards. Also worth noting that I’m not sure what price range you’re looking in, but $10k-$20k to cover down payment, closing costs AND reserves might not get you very far. Remember that for an investment property you’re not house hacking, you’re looking at at least 15% down (single family) with conventional financing. 32% DTI isn’t bad, but of course the lower the better. If you can’t get into your market without that other $50k, that’s a different story. If you buy a $200k property and it appreciates 2-3% each year, waiting 5 years will cost you $20-$30k…and now that $200k house might cost you $220-$230k to buy. If you buy now and in 5 years have $50k to play with, buy another property. 

I don't mess with Craigslist anymore, but always list my properties on FB and Zillow. The worst thing is people scheduling a showing and then not showing up, or asking if it's available and then never responding...but I bet you'll get some decent traffic listing it there. 

Not knowing what area or whether that rental amount is accurate - if an investor took out a mortgage at 75% LTV, they'd probably have around $300/mo cash flow guesstimating taxes, insurance and interest rate. For someone who lives in one unit and puts even less down (let's say 5% conventional), everything else the same as the investor scenario, they'd have a payment around $950 once rent is figured in. Now let's say they move out in a year and both sides are renting for $1,000...they're still only cash flowing around $200/mo. For me personally, I wouldn't be interested at $100/door.

Welcome! I'm down in Massillon (about 45 mins from Cleveland) and invest in Canton. Happy to connect. 

Hey @Remi Olawuyi - when was the property purchased and what was the purchase price? Did you do rehab? 

Quote from @Genevieve Pietroski:

Thanks for your response. We currently have a conventional loan on our first single family. Our Lender says we have the option to use an FHA with only putting 3% down on Multifamily if we move into it. But in order for the loan to be approved we have to purchase the multi 50 miles with a justifiable reason for the move. I'll ask him about the option of putting 5% down on a conventional loan to see if that allows us to stay local. Thank you for the advise.

You're welcome! Something isn't adding up - minimum down payment for FHA is 3.5%, minimum for conventional is 3% on a SINGLE family property. A new guideline just went into effect 2 days ago for owner occupied multi-families allowing 5% down, it was previously higher.

Yep, I have a lender that offers this, can't be in an LLC though. It's a true HELOC, not a HELOAN. Variable rate 5 year I/O draw period followed by 25 year amortization. Min 700 FICO.

Congrats on taking the first steps to real estate investing! House hacking is a great way to get your feet wet. Plan on 3.5% down plus closing costs, have reserves to cover you for the “what ifs” (especially since you’ll have your home and someone else’s to maintain). As far as credit, you can get approved for 3.5% down with a 580, but you’ll want to ideally be closer to 700 if possible for a better rate. Let me know if you have any questions, happy to help. Good luck!