All Forum Posts by: Carlos Valencia

Hello Kayla, 

Congratulations on your current success with your business and real estate investing. Looks like you are off to a good start making moves and working to build your real estate portfolio as well as building a business for yourself and working for yourself. Another lending option you can use aside from DSCR is Bank Statement loan program since you are a business owner. Bank statement loans work great if your business gets a large amount of monthly deposits because the way the lender calculates income is by adding all your deposits over the last 12 months then cut it in half and divide that total by 12 months then take 50% of that remaining balance and use that to calculate your DTI. Due to how the income is calculated is the reason why you need huge deposits every month. Bank statement loan program is another one to look into and see if its a program you can use. Otherwise DSCR is the best option but you do need 20 -25 % down for DSCR and its non owner occupied. Plus you will need 6-12 months in reserves.

@Albert Bui @Matthew Kwan @Kin Meng Sio

Hi Alex, 

Well if the numbers you share are in your favor and you can manage get 90% of the LTV from your home then Heloc would be a great option. The downside with Heloc is that the rates are in the 12-14 and its not fixed as they are adjustable like a credit card. Still cheaper than using a credit card tho. To be conservative lets ay your property is valued at 200k X 90% LTV = 180k -40k you owe = 140k That's a nice Heloc line to help you invest in your next property. Another benefit of a Heloc is that you don't touch your current mortgage on your primary and get to keep your current rate. I would say cash out refi if the rate is better than your current and it makes sense but if the rate is higher when you refi then go Heloc route. Make sure to go over the pros and cons of each t make an educated decision. Real estate can be emotional and you want to make sure you keep emotions out as much as possible so you can think clearly about your options. By the way what market are you in as those prices are very low.

@Albert Bui @Matthew Kwan @Kin Meng Sio 

 Unfortunately we are not and don't have a contact for that state. 

Hi Rodney, 

Real Estate is a long term game especially in this market as its challenging to find actual cash flow properties. Is it possible to replace your income? yes it is. Rentals will take the longest but also the least amount time spent on them in regards to managing. Air bnb do take more work in regards managing and preparing as your basically running a hotel business but higher probability to cash flow more than rentals. Once you have your systems in place running your air bnb will get easier. Fix and Flips if done right have the highest return in your investment but also take 6-12 months to complete and get your return. One deal can be your salary for the year but its also very stressful and takes a lot of your time when working with fix and flips. Same with Fix and flips once you have your systems in place it can be very lucrative. 

@Albert Bui @Matthew Kwan @Kin Meng Sio

Hi Shai, 

Do you currently own any properties investment or primary? In order to use DSCR loan product you will need to own one of these first. Otherwise your considered first time home buyer. Best option is using conventional or FHA so you can house hack and enter the market at 3.5-5% down. # things to look at when applying for a mortgage are credit, assets and income. Credit is important because that will help you get the better rates when applying, Assets are needed to help you be flexible with your purchasing options because depending on the assets you have you can enter the market at 3.5% -5% or 20%. If not 20% then maybe you can use the remaining assets to help with rehabbing your property while living there or use it to get into another property in the future. Income will help determine how much mortgage payment can you take on a monthly basis. The higher your income the better because you will be ale to be more flexible on the areas your looking for as well as the type of properties. Those are the 3 things to focus in order to be enter the market.

@Albert Bui @Matthew Kwan @Kin Meng Sio

Hi Jaqueline, 

You can use DSCR loan product to buy under an LLC. DSCR stands for Debt service coverage ratio. This loan product is an investment loan product that you have to put down 20-25% down. Easy loan product to get approved for as they only look at the properties monthly rent/over mortgage payment. Ideally the lender prefers 1:1 ratio or better in order to get better terms. If the rents are under less than the mortgage payment they will lend you the money at higher rate. In order to get pre approved all the lender looks at is your credit, assets, properties performance and you have to own a property as primary or investment you cannot use DSCR loan product if your a first time homeowner.

@Albert Bui @Matthew Kwan

Hello Caio, 

Your numbers seem to check out. Best solution is to pay off your student loan and that will put you just at 50%. If you can pay it off that's a solution but that only gets you a little bit of room. Still very close to not qualifying. Are you able to increase your income from your W2? Lastly maybe adding a co borrower? 

@Albert Bui @Matthew Kwan @Kin Meng Sio

Hi Jamaal, 

If your looking to get a Heloc from one of your rental properties you most definitely can but for investment properties typically you can only go up to 50-75% CLTV meaning depending on the lender you use and their guidelines. If your rentals have a small loan amount remaining and you still have enough spread in between from your current loan amount to the loan to value and if that's enough money needed to fund your next deal then the Heloc will make sense for you. Just look at what you current loan amount and get the value of the property so you can see how much money is in between that amount. If you have a primary and want to use your primary's equity then the lender can let you go up to 90% CLTV. Meaning you can get way more if your loan amount is low compared to the current value. Many of our clients have been using Helocs to fund their projects.

@Albert Bui @Matthew Kwan

Hello Komal, 

Welcome to BP community where you can learn a lot by connecting with people on here and reading through the forums. First thing I would say is to study all different ways to begin investing and see which one will best match your personality. You might have to try all of them before you actually realize what you enjoy. Look for local real estate investor meetups to meet people who are possibly willing to share their experience and what tips they may share with you. In the meantime continue saving more money and make sure you are using your credit meaning make sure you have a credit score because when you actually begin applying that's an important part of the process so that lenders can see you are responsible at paying off any debt. No need to have major debt just by having at least one credit card and using it often will help you. Those are some things to consider when looking into getting started. 

@Albert Bui @Matthew Kwan

Hi Daniel, 

If your budget is around 250-300k definitely stay away from California. Unless your looking to live in the outskirts of all the California major cities then yes you can most definitely find properties in that range but not many people will want to live out in those outskirts. Its really hard to do BRRR in this market in California. I would go more for Midwest areas or Dallas which is not that close to California but it depends what your definition of close is to you. Are you looking to use cash to buy your future properties or using borrowed money like mortgages?

@Albert Bui @Matthew Kwan