All Forum Posts by: Kevin D.

Kevin D. has started 3 posts and replied 25 times.

Originally posted by @Tom Mole:

Just to add to what @Ali Boone was saying....or maybe she did say it, but I wasn't clear. Since you can purchase with your own funds, then why not do that, find out what you need to learn about landlording out of state, then once the rents have seasoned enough to make the lender comfy, ask for conventional financing as a cashout refi. You'll have your leverage back.

Also, check with the local banks that carry their own paper. They often have less restrictive requirements when they don't have to conform to Fanny and Freddie.

I hope that helps a little anyway.

All the best.

Thanks Tom. I see what you and Ali meant by "seasoned funds" now. Even if they can include the rental to cover the mortgage of the investment property, I am still stuck with the two homes DTI so that would mean conventional financing is out.

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Originally posted by @Ali Boone:

A couple thoughts of advice. The first is, make sure you are working with an extremely investor-friendly lender. They will be the most helpful in making it work for you. Non-investor friendly lenders will find ways to stop a loan all day long. It makes a huuuge difference, trust me. The second is, once you talk to the investor-friendly lender, ask upfront if using a car loan is a viable source for a down payment. My guess is it's not. A way around that though is to let the funds season before applying for the loan. But if you can work out that financing option, be sure that the numbers still work on the property in terms of the interest you are paying on both loans as compared to the the cash flow you are receiving. Since it would be a 100% financed property. Assuming all that works out, I'm a huge fan of leveraging as much as possible. Just have to make sure the logistics work out.

After that, a lot of properties have private financing options that could care less about your personal qualifications but rather they care about the property itself. i.e. just about anyone can qualify for those. The terms aren't as advantageous as a mortgage, but they still let you utilize leveraging.

Hope that helps! I live in LA and have always only bought out-of-state myself.

Thanks Ali for you reply. Do you have any referrals for investor-friendly lender? Right now, I am only looking at the big banks which means I"m hitting a brick wall. I didn't realize there were such a thing as investor-friendly lender. Also, I'm not looking for 100% financing or am I looking at any of my car loans as a down. I am OK with 20-25% but even that is a no-go with the big banks. My funds have been sitting in my Vanguard account for 4 years so that's not an issue either.

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Frank and Joey, Thanks for the info. I have sent both of you a PM.

One more piece of information: The second property is being paid my relatives (who currently live there). If I have record that someone else is living there and paying for the mortgage, does that allow the debt to be removed from DTI calculations? If possible, I may qualify for a convention loan.

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Brie, Thanks for the advice. Are you saying that commercial loans may lend to individuals with high DTI?

I was hoping to dip my toe in with one property first to see how easy or difficult it is to own out of state rental properties. The 8 property portfolio deal may be an all-in gamble considering I have no experience in owning out of state properties. I will think about that, thank you.

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Hi,

I'm a newbie investor from California who's looking to invest out of state because the fundamentals in California is out of whack. My first investment was a 4-plex in a bad neighborhood in San Jose with low quality tenants. I sold within 3 years but learned quite a valuable lesson: don't invest in low quality neighborhoods with low quality tenants! The headaches were not worth it!

So now I'm looking to take my first hand experience coupled with tips from BP (I wish I found this place earlier) to invest somewhere else with good fundamentals. I am looking to invest out of state where a down payment the amount of a new car can put me immediately in positive cash flow territory. Comparing the fundamentals from other states, I'm amazed why anyone would rent at all since it seems like a no brainer to just buy as it's ridiculously cheap to own!

Okay, so my biggest problem is this: my DTI is very high because I own multiple homes. However, my credit score is excellent 750+, income is high, and my liquid assets is also relatively high (500k). The prices for some of the homes out of states are equivalent to a very expensive car. Those car loans only care about income and credit worthiness. Is it possible to get loans to purchase homes in these other states where the lenders are more lenient on DTI?

I can always purchase with cash, but without the ability to use leverage, real estate loses its shine. Any advice is appreciated. Thanks in advance!

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All Forum Posts by: Kevin D.

Kevin D. has started 3 posts and replied 25 times.

Post: California Investor looking to invest out of state but have a problem with DTI

Post: California Investor looking to invest out of state but have a problem with DTI

Post: California Investor looking to invest out of state but have a problem with DTI

Post: California Investor looking to invest out of state but have a problem with DTI

Post: California Investor looking to invest out of state but have a problem with DTI