All Forum Posts by: Clayton Silva

As someone who works for a mortgage brokerage, I may have teeny tiny bias.  Brokers are better.  We do it better, faster, often have better rates, and can get you multiple different options.  The benefit of being a broker is that we are 100% in the client's corner.  I don't get paid by Wells Fargo to sell you a Wells Fargo loan, instead I get to go loan shopping for you and find the best deal for your specific situation.  We at One Brokerage have a network of over 100 lenders and we can shop your loan around to find you the best deal.  

As far as things to watch out for, I would watch out for an unlocked rate if you start the loan process, I would recommend getting locked in as quickly as possible as rates are generally trending in the wrong direction (upward) right now.  I would also look out for upfront fees or costs.  Most don't charge anything upfront and are not compensated for their work until the loan/transaction actually closes.  

Some hypothetical questions to ask are:

1) How much do you typically estimate title fees to be?

2) Do you invest in real estate yourself? (Ask the broker, and also ask how many loans and different types of loans the broker has.)

3) What are your typical closing timelines? 

4) What is your brokerage's competitive advantage or niche if any?

5) How available are you and by what medium? (Email, text, call etc, and time of day/days?)

Hey Aaron, I'd be more than happy to help! Let me know if you have a loan estimate or something you'd like to go over or just shoot me a DM for general questions.  I don't know of any courses, but I have closed quite a few loans and work full time in lending so I'd love to help in any way I can.

Hey La'Terrius, typically a pro forma is an expectation of market rent (what the seller or the listing broker think the property could generate).  It's like a forward/future looking projection while a profit and loss will encompass what the property actually generated in the past 12 months or YTD.  The P+L is a snapshot of the recent past performance and is the actual performance of the property.  Be careful though, because most P+L's are generated by the seller and could be accurate or complete misrepresentations, so I would want a P+L that was blessed off on/signed by their CPA depending on the size of the deal.

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $170,000
Cash invested: $170,000

On market, side by side single family homes. Bought them in cash with a private loan from family. Doing light rehab and replacing both roofs and refinancing (delayed financing to get around the new 12 month seasoning requirements for cash outs). Not sure what they will appraise for but hoping to leave between 30-15k in the deal which would be fine with me considering they were purchased for $170k (combined) and already kick off $2,150/month in gross rents. Stay tuned!

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $170,000
Cash invested: $40,000

First attempt at a BRRRR. Found two side by side single family homes that had a funky deed/title issue. The realtor thought it precluded them from being lendable, but it was actually not an issue. Ended up buying them in cash with a private loan from family. Am doing light rehab and replacing both roofs and will refinance (delayed financing as it allows me to get around the new 12 month seasoning requirements for cash outs). Not sure what they are going to appraise for, but I am prepared to leave at least 30k in deal but I think it will be closer to 15k left in the deal which would be a great purchase considering they were purchased for 170k (combined) and already kick off $2,150/month in gross rents. Stay tuned!

Hey David, I would befriend a local title agent in your area.  They can pull a lot of this data and may be able to assist you with that! Hope this helps, as that is where I would start.

I may have a killer lending product for such a deal as this.  Want to DM me the details of the property?  I might be able to help with the financing side. 

Hey Josh, first things first, $361 dollars a month is so much cheaper than a formal education, and what you've learned from this one deal is likely going to be invaluable and catapult your investing to the next level.  

If you were my client, and I was advising you, I would look at a host of things:

1) Are you a high net earner?  --> can this property have significant tax benefits for you and allow you to recoup your "losses" at tax season? Is this property going to put you under financial duress and if not, what do you anticipate the value to be in 5 years?  Is that appreciation worth the relatively small fee you are paying now?

2) Is this going to hinder you from buying more rentals? --> if your DTI is maxed out, can you switch to DSCR or commercial? If it doesn't hinder you, then can you buy another better one to offset the losses and keep both?

3) Can you pivot strategies? Could one of the units be furnished and rented out on Airbnb or to insurance companies for temp housing or to traveling nurses etc. to generate more revenue? Could both?

4) Can you move into one of the units yourself (if you don't already live there) and drastically reduce your own living expenses by enough to offset the "losses"?

There are a host of other ways that this could be a great deal after all!  No matter what happens, I would love to connect just so I can stay updated on whatever you decide to do!

We work with a lot of different hard money lenders, and typically they analyze everything on a deal by deal basis.  As far as I understand as long as your credit score is sufficient for their liking, they (hard money lenders in our network at least) do not care how many you have.  We also have some pretty cool bridge products for flippers right now too! 

Typically, as far as I understand, in most states, your attorney is correct. You cannot assume a mortgage that remains in someone else's name and then take title (the legal term for transferring ownership). The title/ownership of the home will always remain with the noteholder, and you, the buyer, are essentially establishing a rent to own agreement with the seller. You may, possibly, be able to add yourself to title but the seller has to remain on title if they are on the note/lien/mortgage. Also, what kind of loan does the seller have because not all loans are assumable. The only assumable loans are government (i.e. USDA, VA, and FHA). In the case of the VA loans, people don't realize that they are often handicapping the veteran who may be unaware that he/she is unable to apply for a new VA loan so long as their other VA loan is out there even if someone else assumes it. (There are work arounds for veteran to veteran eligibility transfers but I digress). I'm not an attorney, so take everything I say with a large and healthy portion of salt.

I keep rereading your portion about recording title, not sure what you mean by that.