All Forum Posts by: Charles Granja

 Hello Andrew,

I mean Veteran Affairs. They back the mortgage, so they have a part to play in the transaction with the lender. They have very strict underwriting guidelines compared to FHA and conventional.

I had a property last year pass through other guidelines, but because of tax returns fail at VA underwriting guidelines. They essentially say they won't provide a guarantee for the 20% down payment amount.

Hello Biggerpockets,

I would like to hear your perspectives on this.

I do not pay property tax in Chicago and I found that I can purchase a triplex/quadplex in Chicago or the suburbs for up to 800k. After this write-off, I would be saving 30% on PITI, approximately 8-10k annually. By coupling this with a VA assumable, I can essentially takeover an existing mortgage on a property at around 2.5-3.5% interest rather than the 7.5-8% curent rates.

Essentially: For 800k of debt service today everyone else would pay $6800$ a month, for me on a 3% loan it would be $3650.

The problem:

The way VA underwriting works, I have trouble qualifying for the loan. I do not have "bad" debt, but already have 5 houses. 1 of the houses is paid off, but doesn't have 2 years of tax returns until next year. The other one I bought and renovated this year, I currently live in it. The VA said that they cannot count the income for the paid-off property and the primary residence (once rented) until there is 2 years of tax returns. So, I am hitting a roadblock.

Should I just partner with someone? Should I try to wrap a loan? I don't yet have an acquisitions funnel for off-market assumable debt. 

Hello everyone,

I am planning to invest in the Austin market and was looking at Taylor, Hutto, Manor, and Liberty Hill. I’m seeing good fundamentals and wanted to hear any insights from local investors if possible. I’m used to investing in the Midwest and there is definitely a lot to learn, but I am excited about Texas. 

I got 5-6 bids and had the situation resolved for around 750$, they were an LLC. Yours may be more expensive depending on area and size of the tree.

 Not a problem. In this situation are you talking about buying a house or getting a heloc? If you do the heloc they will ask you questions about the valuation and send an appraiser.

You are buying at a bad time, the 10-year has spiked significantly due to the bad inflation report. I bought in January at 5%, now the same loan would cost 20-25% more on PITI. No one can tell you what interest rate to expect because of the volatility. To be completely honest, if I were you I wouldn't buy a house on these terms because your cap is probably 7-8% and you can get no-risk bonds for 4-5%. I have purchased houses in Kansas City, it is a good market, but buying CORE right now isn't really worth it. If your debt service is sitting at 1k and your rents are 1600, that's the same as buying in California without the benefits of spiked appreciation. If you have cash its better to wait for inventory and prices to normalize. Or at least wait until the 10-year normalizes again, there is a lot going on in the market right now.

If you do continue with this transaction, at least find a lender that does free rate drops and attempt to renegotiate during the inspection contingency. Alot of lenders are offering this right now because of the interest rate volatility and sellers are more flexible now because no one is buying houses. New listings have significantly decreased and the increase in inventory is coming New build price cuts and a lack of homebuyer affordability. The housing affordability index is below 100 on the west coast, in many markets it isn't doing well. The midwest should hold fine so at least you are buying in the most reasonable area.

There are alot of options that you could do, but I wouldn't recommend any of them. You could sell or do a heloc, depending on your equity position and goals? It is hard to say. You shouldn't do a cash-out refinance because you pay closing costs again and will have a higher interest rate. You shouldn't sell an equity stake in your home because the return you would create with the money would likely be less than the return handed to the holder.

You could do a heloc, which would be short-term and could work assuming you are approved. It would depend on your equity position, credit worthiness.

Be careful with using debt right now. If you are sitting on a 3.1% 30-year fixed, it doesn't make much sense to leverage up when interest rates on investment properties are sitting at 7% or higher. If you buy on a primary and wait for the 10-year to drop, you may be able to get something worthwhile. I closed on a house in January at 5% and it's a value-add, but those may not come again, it really depends on the market, CPI, overall economy.

Prices will fall in the short term and inventory will build up, if the numbers don't work, don't feel the need to buy, just hold cash and put in short-term bonds at 4-5% no-risk until the market normalizes or the government starts quantitative easing. Real estate is a good investment but if you are cash strapped now is not the time to leverage.

 I recently bought a property and just paid someone to get it removed. Its best to deal with that situation promptly. Best of luck.

I have generally called them properties a specific class based on the neighborhood quality, submarket income, crime rate, and school districts. There isn't a strict definition for classes, but it is generally understood what they are.