All Forum Posts by: Caroline Gerardo

1. a mortgage company won't risk sponsoring unknown person without license in this market. I hire a college graduate in mathematics, who has a sense of humor, can pass rigorous background check, has perfect credit, and has desire to learn sales. 

2. no mortgage company gives free leads

3. mortgage loan officers do not get salaried, we are 100% commission. Some companies offer a seasoned vet a draw to move but the draw is repaid by the Loan Officer through his closed loans.

4. No mortgage company will put a newbie on the street remote, far too much liability. If you quote it wrong, we eat it.

5. The tests cost about $200 each, licensing per state anywhere from $200-400 a year The test is about the laws and history it does not teach you anything much about the job. It's eight hours for one state every year. NMLS checks your background carefully. Errors and omission insurance is covered by the company $$$$

Look for an entry job in mortgage at a bank or credit union. Minimum wage to start, but you need to learn: all the terms, how to calculate, title, legal, products, insurance, appraisal, credit... but most of all how to sell and market yourself. It's easier to enter a real estate office and learn the terminology there then switch when you can show you have skills to offer.

A mortgage lender is going to pay $11000 for every loan you start no matter if it's denied or they shop rates. There are huge back end costs. 

Hurdles: There are fines and jail time for making mistakes. This is the worst I have ever seen the mortgage industry, worse than the 2007/8 crash. Two million people laid off. Thousands of companies BK.

But it will come back. 

AI can't beat my brain yet. I'm confident in the future.

No the appraiser is doing a 1007 market survey based on long term rents as of the day he saw the subject property.

There now are conventional products without the FHA self sufficiency test with 5% down. However the High Balance conventional loan is not as high as the FHA loan amount.

Know the market rents. Have a written hazard insurance quote on day one.

@Hsiang Lo You can use a HELOC to purchase and rehab. To refinance to a conventional loan if your plan is long term hold the GSE's (Fannie Freddie) do not give you any appraisal valuation credit for rehabilitation work in this DELAYED FINANCING loan. We only count the purchase price (in the contract and settlement).

If you want a cash out refinance to use the rehab costs you are required to wait 12 months https://guide.freddiemac.com/app/guide/section/4301.5  Fannie is the same
Guide Section 4203.4 for Loan Product Advisor 
Loan to value is lower. Pricing is higher.
SFR non owner 75% cash out 2-4 units 70% non owner cash out.

Can you complete the rehab in less than 12 months? IF so you are limited by the sales price that you paid, no rehab cash back. OR wait the 12 months and keep paying on the HELOC until you get to 11 1/2 months after the close date to apply.

Full documentation.

1.Purchase contract, your new fire insurance declarations page, and preliminary title report.  

2.Past two years IRS returns 2022 2023 the net income after expenses, with paychecks past 30 days or profit and or loss 2024 year to date

3. your bank statements for 2 months showing you have the down payment in your name, 

4. ID, lease agreement with deposit at closing

After you send these to the servicer, they have the trustee review, wait 60-90 days and update your bank statement/paycheck/profit and or loss, provide estimate settlement sheet, and anything they ask for. Then be notarized and wire the funds, they don't table fund even in those states...

Seller cannot be late in past 12 months or in default or in a modification or any other troubled asset review department like bankruptcy.

FHA's are mostly assumable, VA is but VERY tricky as it isn't good for the veteran - they lose a percentage of eligibility.

Servicers do not have loan officers to help you, they don't get paid on assumptions. The buyer has to be super organized and have similar qualification to what was needed when the loan closed. IE: you need a good FICO/income to pay all your current bills with debt to income ratios 36/40. Since you are buying as an investment you will need a lease at closing, so it has to be inhabitable. NO special credits to seller outside of escrow, some make you sign agreements that you are not related and are not renting back to the seller.

Conventional loan (Fannie Freddie) never allows any bumped up price to include rehab. Underwriters comb through the settlement statement AND require your bank statement or HELOC or accounts where the funds were wired from, and proof that the same wire went to title. If disbursed to buyer or contractor it is NOT included in delayed financing valuation.

The interest rate is higher than a purchase money loan as is priced as cash out (there is an add). 

People on BP say lots of fantasies.

https://selling-guide.fanniemae.com/Eligibility/Mortgage-Eli...

There were some hard money lenders in 2022 offering a short term one year-18 month loans at lower loan to values (65%) allowing small rehab but most are now not doing these.

Not that many triplex listed for sale in San Diego.

FHA is a good start with 3.5% down but then you are stuck with mortgage insurance until you refinance conventional or sell. There are conventional loans with 5% down as well which when your value increases or 60 months pass the mortgage insurance can be dropped.

Student loans even if deferred are part of your debt to income ratio but the income from the rents on 1 or 2 extra units can offset. Don't payoff the student loans if the interest rates are somewhere near 6 or 7 %.

Feel free to call or ask questions as you feel comfortable.

T. PHILIP WASHINGTON 

A CPA and an attorney need to answer this legal question. If IRA partner with you a non-IRA funding source, that you as partner may owe taxes AND your SDIRA may also be subject to Unrelated Business Income Tax (UBIT). 

You need a CPA to file the LLC returns (costs $)

Add all the advisory fees, higher loan costs, filing costs, and hiring qualified companies as the middle soldiers... into each transaction.

Few to no individual hard money lenders with their own cash offer loans to SIDRA vesting. There are about ten hard money companies that will at low loan to value with high interest rates. No conventional loans, never. Get real legal advice outside of BP and understand the rules. If you make a mistake expect to pay the IRS, and the state, and maybe the state where the property resides.

Inspection of plumbing and electrical. Do a 30 year fixed there is no savings in an Adjustable Rate PITI $1802 with 20% down fixed. You know the neighborhoods and location, go for it.

So W-2's for 2021 2022 2023 are similar total year income?

Or are you depositing everything into one bank account?

You have the cash investment needed to close in an account?