All Forum Posts by: Eric Johnson

Kevin, it would free up capacity for conventional loans. I sent you a DM. 

Both the purchase price and the rehab amount come out to under 50k? 

I'd question those valuations in comparison to your ARVs. Even in C class neighborhoods properties are 40-50k and you put 20-50,000 into them...

Probably not worth it.

They can ask for whatever they want to satisfy the documentation requirements to meet their lending guidelines. This is a question for your lender, based on what you are trying to do. There is no blanket statement that can give you the correct answer.

Jared, you're not going to cut corners and get around any guidelines. If it were that easy, literally everyone would do it. 

What you are assuming to be true in your head is not true in reality. A for effort though.

FHA mortgages are typically 3.50% down, and if you refinance to conventional (I'm giving you hypothetical possibility than it CAN happen), you would probably need to bring 10+% equity to the table, which is the same as needing cash for a down payment.

Save up, or get a partner.

Bart,

Start with the after repair value, search sold remodeled homes in the area that are comparable. If you're not sure, ask an agent to help you. Can you partner with someone who's more experienced? This would be a great chance to allow them to bring their knowledge of deal execution, while you soak up the process & get a cut of the profits. 

Personally, if I were you, I would bring a partner to the deal who has verifiable experience doing at least a couple flips. You don't miss the opportunity & you will learn a lot. Start searching in your area and start making calls if you want to line something up.

*sarcasm* If I can turn the clock back to the hearty age of 2, by god there'd be no better age to get started in real-estate. Oh man, if only I had the foresight back then!

It depends on how you are qualifying. Do you make enough personal income to go FHA or do you need a rehab loan? (which will be asset based)? If you can qualify with FHA, then do that. Talk to a local loan officer at a smaller bank (don't go to a big bank for 203k deals unless you have 8 months to close).

FHA also has self-sufficiency test.. The will use the formula total # of units - 1 x .75 for the subject property rental income. You will need to show that your personal income can fully satisfy the obligation with the corresponding DTI guidelines the lender has.

Hi Nate, if you're going to be going that route, then DCR of the properties is the main underwriting qualifier (along with verifying leases/rents, and property market values). I'll shoot you a DM