All Forum Posts by: Guifre Mora

What would happen if I did the BRRRR deal as an owner occupant Using private money. This would eliminate the rental part of the method and I would cash out refi for a down payment for an investment property. Thoughts?

Connor,

Sure house hack can work if done correctly.

I'm curious how much downpayment would you put down towards the purchase with private money? and given the current lending conditions, which will probably stick for the rest of the year if not next are you prepare to cash out at 60-70%?

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Originally posted by @Michael Slockers:

Well I have finally gone through the teeth-pulling exercise of providing a bank with every detail about my life, so I can get another loan to refinance one of my properties (property #1). Now that they have the information they need, we're discussing refinancing MORE properties. Interest rate is 4%, so I'm willing to look at the numbers.

However, I'm finding out it isn't just about the numbers, is it!? My property mentioned above (#1), is an easy decision because I have it with a private lender and need to pay off the loan by October. Urgency drives me to refinance.

Property #2 is a private lender deal that I still have until year 2026 on. Refinancing will save me $11 per month, after closing costs, etc. That's not much of a savings! Plus, it will re-start my 30-year clock. Is it worth it in order to just have the long term (through Year 2050 👽)? Cash flow math doesn't make much of a difference, but peace of mind for long term. My private lender may not love the idea, but can't please everybody, right?!

Property #3, almost the exact same situation, I have a private lender at 4.5%, so the monthly savings are trivial. Benefit is locking a rate through 2050.

Property #4 is on a business loan with a prime-plus-one rate. I think it is 6.5% right now, something like that, and on a 20-year amortization. My monthly payment will go down by $228 on this one. It's a very easy decision.

As often happens, just jotting my thoughts down in the post helps me answer my own question. I do love the idea of long term low rates, inflation-hedging, etc. I think I'll refinance all four. THANKS FOR THE INPUT! LOL

(Cash-out refinance, while appealing, doesn't seem to be as achievable because the rates go up. I could probably only get $10-20k out of each property too.)

Glad to help... LOL ... I would suggest you do 2 things.

1 put everything in a spreadsheet and see how the entire portfolio performs altogether - at the current rates and when refinancing and see in what year it makes sense to refinance and pull out equity to re-invest. Remember you also have earned appreciation and that needs to be computed.

2 if your goal is to hold and never refinance ever then lock to a lower rate but you have 4 properties, I doubt you will stop there.

Property 1 & 4 are a given to refinance but 2 & 3 it's just costing you money to do so, at a min you need to save 1% in rate.

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Originally posted by @Logan Ward:

What is the best way to find lenders that understand real estate investing? I'd like to purchase my first house hack to begin my investing journey but the lenders I have talked with so far do not support the type of loans I've tried discussing with them. I want the low down payment style loan such as an FHA or a Home Possible loan. I don't want to start shopping around before I become pre approved and without a understanding lender I'm unable to begin anything. Any recommendations? I'm located in Iowa to specify a location.

Thanks!

Let me answer with a parody:

Finding Borrowers that understand investing ... or better said Lending.

This will be my next post.

Logan you are trying to insert square peg in a round hole. Go to a Ferrari dealership and ask to pay the price of a used Toyota.

It is not what you want and how you want it or the lender's job to understand you.

It's about how you qualify for a loan and if they carry that kind of loan, to begin with. How lending works that's what you need to understand that first, and you will become a better investor ... future investor.

So get all your docs in a row first before you waste the lender's time. Do you qualify for a low downpayment loan? what are the qualifications you need? What loan programs are there for low LTV borrowers, what's the min FICO score, do you know your FICO? how many months in reserves do you have? are there any state-specific low LTV loans available?

Gather all this and then knock on doors and send emails and make phone calls do your due diligence.

Good Luck

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Originally posted by @Steve Rugg:

Does anyone have deals that were put in escrow before the COVID stuff and are now either canceling or renegotiating? We have a good (not great) deal in escrow on a 40+ unit complex. It was a value-add opportunity, with a plan to do some interior rehabs, raise rents, lower expenses, and improve management, but now we are not so sure about those opportunities...at least in the short term.

Yes, but what is your remorse during CV-19? are you buying price too high, to begin with? or you need to move tenants out to rehab?

People need to rent somewhere lending is tight for low LTV loans so there will be even more renters who need and prefer to rent.

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Originally posted by @Jaideep Sawhney:

Hello,

My wife and I have 3 properties (single-family) with both our names on the deed. My wife is on the loan for 1 property and I am on the loan for 2 properties. We are looking to purchase our 4th property with my wife's name on the loan.

I came to know from one of the agent (local bank) that even if your wife has only 1 loan so far, she is on the deed for 3 properties and that it will count as if she is responsible for all the 3 properties. Thus, her DTI ratio will be calculated based on all 3 properties.

Is the above information correct?

Also, are there advantages (for acquiring bank loans in the future) to getting the loan/deed in either one of our names versus getting the loan/deed put into our names jointly?

Please advise. Thank you in advance.

You can apply by your self for a mortgage loan leaving your wife DTI out of the equation. However, not all programs allow this. Government-backed loans want credit reports from both spouses even when one won't be on the mortgage. Mortgages and Deeds are two different pieces of paper so even do it makes sense to say it how would a bank know who is on the deed when running a single individual credit report?

To your second question, none.

1 Vote

Originally posted by @Onesmus Hangula:

How can I(a student at the age of 20 years old) buy a property to start my real estate journey, as I've really prepared myself for it?

If it may include a bank, do i need to get an income in order to get a leverage?

Yes, you can own property staring at 18 I guess, get the downpayment and closing costs as well as reserves, and that's all you need. Yes, you must have income and a good FICO score.

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Originally posted by @Barbara Hlavaty:

My daughter was doing a cash-out refi on her duplex, but her lender just said the following. Has anyone heard Texas Cashout A-6 for multi-family units are no longer allowed? Does she have any other places to go to refi-cashout that are not with the secondary market Fannie & Freddie?

(So Fannie Mae and Freddie Mac are saying they won’t take Texas cash-out multiple-unit properties.I have to change your loan back to a rate term because no investors will buy it now. Any guideline changes these days don’t have grandfather clauses ... if the loans aren’t funded delivered to the investor that’s it. It’s just Texas cash-out A6 is their problem I guess —- that’s why my lock desk didn’t realize an issue because they let us price the loan but then the investor said no Fannie won’t take multiple units Texas cash out. This is the craziest thing!!)

Does she have any other places to go to refi-cashout that are not with the secondary market Fannie & Freddie?

Yes, that is correct. Cashouts in the secondary market especially backed by a Fed agency are close to nonexistent. The investor market and especially servicers are very afraid borrowers will cash out and jump into forbearance. In the secondary market, some loan scenarios are being priced at a loss meaning servicer needs to pay the investors to buy the loan.

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Originally posted by @Evan Dyer:

Need someone to go in depth more on refinance. Want to get a full grasp of it (Beginner).

Evan, refinancing is basically getting a new mortgage on your property. You could do a Rate and Term or Cash out. Both are the same but cash out gives you cash from the equity.

Scenario 1) Say you buy cash, rehab, or not. Once the property is stabilized (rented) and title seasoned (1-6 mo. on title) depending on lender then you would get a loan for up to 75% of the new value of the property and take 75% of the value as cash.

Scenario 2) Buy with a short term loan (bridge, Hard Money, Private investor) rehab, or not. You would get a new loan just like scenario 1 but it pays off the original purchase loan. Keep the cash if there is a difference between the original loan and 75% LTV cap.

Hope this helps

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Originally posted by @Mike Rose:

Hi, im looking for a bank etc. who can provide home equity loan/line of credit on investment property in n.y. ?

Mike this is one of the toughest things to get under the CV-19 mayhem, try a local credit union -NY specific bank or Us Bank I believe may still be doing them. Good luck

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Originally posted by @Megan Brooks:

Hi,

I'm playing around with the rental calculator and have a question about the category "total cash needed" that is determined after the deal is analyzed. Is this the amount suggested by BP that is the down payment, closing costs and suggested reserves? Or am I totally off on that?

Thanks!

Megan, you are on track.

This "amount suggested" would be what you inputted in the calculator- downpayment, closing costs (points, origination, escrow/title, rehab).

Unless you are financing any of these items they would be added by you to the financing loan amount.

The "reserves" is a variable that is lender specific- cash to close that they will determine on the loan offered. If you are looking for this you should speak with your lender and get an estimate.

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All Forum Posts by: Guifre Mora

Guifre Mora has started 2 posts and replied 838 times.

Post: BRRRR DEAL WITHOUT THE RENTAL

Post: My emotions or my math: should I Refinance?

Post: Finding Lenders that understand investing

Finding Borrowers that understand investing ... or better said Lending.

Post: Underwriting advice during COVID19

Post: Name(s) to put on loan/deed if married-Advantages/Disadvantages?

Post: How can I start owning properties at age of 20 years

Post: Texas Refi-Cashout - Duplex - New rules say not allowed???

Post: Can someone explain refinance in depth?

Post: home equity loan - investment property

Post: Rental property calculator help