All Forum Posts by: Frank Avallone II

Awesome! Tons of luck with the new investment!

Hi @Leonard Rybak, I would advise trying to fix the underlying problem first which seems to be your debt to income ratio. See if you could start to earn more with entertaining another job. At the same time start trying to eliminate any bad debt you have. Doing this is going to make the process much easier moving forward. 

Not to say that DSCR loans are a bad option but doing what I mentioned is going to help regardless. I know we typically can do DSCR loans at 20% down if that helps. We also typically require only 3-6 months of reserves depending on the scenario.

Hi @Gurjot Grewal, sorry that no one has answered you in the past 25 days. It is normal to not use an attorney in a lot of areas. However, if you are inexperienced you can always to speak to one about helping you look things over. 

Hey @Alexia Healy, 

Happy to hear your are eager to learn and create a better future for yourself.

I agree with @Theresa Harris, I think talking to lender like myself would be a great place to start just to see where you are at as far as qualifying for purchasing a home. From there you should have a little more insight on what the best move with the settlement money would be. I wouldn't pay off the car just yet until you look into the whole scenario as a whole. If paying off that car is going to make the difference in qualifying then that may be a good route to take. 

Hey @Ashley K. Butler, happy to hear you are taking the necessary steps to get into real estate investing. I love hearing the optimism and motivation behind your post!

I think utilizing the VA loan to get into multi-family investing is hands down one of the best starting points out there.

I would definitely look into getting pre-approved for a VA loan.

Aside from that, keep doing what you are doing. Network, talk to other investors, spend time on this forum, watch youtube videos, read books, the more knowledge and understanding of what is involved the better!

In addition to that I would also work on optimizing your finances as best as possible because this is only going to help. Is there debt that needs to be paid off to improve your credit and your pre-approval amount? Do you have money saved up for costs associated with buying and owning a property?

Hi @N Wilson, 

Not sure why you would need a commercial loan for a 3 unit residential home? I think you should certintely talk to another lender or two in order to see what other options you have. Should be able to do this with 25% down investment conventional loan.  

Hey @Nicholas Bronte,

Great question! 

Great to see you wanting to provide everything in the most professional manner. While it may be nice I don't think you have to worry about it to much. You can send what you have and the lender could always ask you for more information if needed. Rather than a napkin(haha!), I would recommend an excel spreadsheet for anything the lender did not provide a template for. Most of the times we will send out a template for anything we are requesting. Don't be afraid to ask your lender any questions at all, we are here to help!

Hope this helps 

Hey @Alexis W.! 

Great question, I had the same one earlier on in my investing journey.

It is a complex question only because it depends on how the numbers work out in each scenario and which loan types you were considering for each purchase.

To answer your question about the positive cash flow, banks do indeed consider rental income from the properties you have and/or are buying. 

For example, if you were to buy your forever home first then it will be harder to qualify for the rental property because assuming you are purchasing a single family home as your primary residence then you will have that mortgage payment as a debt when trying to qualify for the investment property. One work around for this is that you can always use a DSCR loan to purchase an investment property and then you would qualify so long as the rental income exceeds the proposed mortgage. DSCR loans do not need to look at your personal income to qualify.

If you were to buy a cash flowing rental property now then turn around and try to buy the forever home immediately lenders would be able to count 75% of that lease agreement rental income to qualify you for your next purchase. After you have a year of rental income we can use the rental income on your tax return to qualify the next purchase.

Aside from that one thing to consider though is what is the cost of waiting? How much could having a rental property for 3 years help you? 3 years of cash flow, tax benefits, potential appreciation, equity building through mortgage being paid by your tenants. If you are prepared and ready to buy a rental property I would consider doing so if the opportunity presents itself. If the purchase makes sense it could make it that much more realistic to buy your forever home down the line and be in a much better financial situation.

Hope this helps!

Hey Greg, 

Great question! So as long you are shopping the mortgage lenders within a 30-45 day period the bureaus recognize people need to be able to shop lenders so they typically only count this as one inquiry!

Running credit for a car or home loan typically does not have as much of an impact on score as people might think.

The reason why people think this is because if you are applying for multiple credit cards the bureaus do see these as individual inquiries. 

Feel free to check this link out that goes into further detail.

https://www.experian.com/blogs...

Hi @Mickael Castillo! 

No need to overthink things haha! What is your intention with this home you are referencing? 

Do you have some goals for your initial real estate investment? Have you spent some time researching and learning about how to invest?