All Forum Posts by: Hyeseong Park

@Caroline Gerardo advice is great.

Also, if you don’t want smokers to smoke in your house, you have to mention that in the lease. 

I’d talk about that in person with everyone as they come to see it. It can be listed as just part of the features of the house. 

There are lenders who will do what you want but they charge more upfront and in prepay to cover the possible loss.

Cancel the listing, get it earning income with an excellent tenant and wait two and a half more months to start the cash out refinance.

It costs a lender $11000 to set up a loan they do not want you to continue to try and sell and pay them off early as they lose money.

Many lenders are not going to like that you listed for sale in MLS.

Some nonQM lenders will add a prepayment penalty because of being listed and you need a rental agreement and deposit Before you close. They will require the listing cancelled you can't do both at the same time.

If it didn't sell, then the value is less than you think. Get the comparables to provide to the appraiser- sold last three months, similar type and size past three months.

Hi @Hyeseong Park, from what I understand of your purchase, it was under your name not a LLC, right?

If so, and since you live in PA, you can check S&T Bank or First National Bank and see what they can do.   

I looked in DSCR loans, and they were expensive! One wanted $37,000, another $26,000 and the last $9950 all so I could get the $180,000 I need to finish my rehab on a rental loan. Also, they varied in term from six months to a year. So, if I the work was not done in the stated terms, they would get the property. I know you have finished your rehab so this isn't a consideration for you.

Ideally that would seem to be enough time.  But, in my area, work moves slowly.  So, that wasn't a great option as the stress I would be under with no control would have been astronomical.  

First National Bank gave me a loan that I got from the equity on my current house, $108,500 for $0 out of my pocket.  There were no fees, points, nothing.  

S&T Bank is giving me the remaining loan, $92,000 for a $90 appraisal fee.  This is coming from the equity in my rental.  

I've got good credit, so that helps, but you have a finished, ready to go house!  First National Bank would have given me a loan on the rental had it been livable.  So, I'm sure you could get a good loan from them since yours is livable.  And, it will probably cost you nothing.  

Did I mention my interest rate from First National Bank is at 5.39%?

I called lots of banks, hard money lenders and brokers and none could compare to these two in my area.  

Make certain to pull the amount of money out that the rent can cover, along with taxes, insurance, maintenance and capital savings.  So, in essence, that loan and the care of the house will be paid for by the renter.  The money you pull out from the loan can then be used to buy another house!

By the way, WAY TO GO!  You did it!  You bought a house with cash!  You fixed it up with cash!  You've created a free and clear source of revenue!  OUTSTANDING!  

You must be so proud of yourself!  WELL DONE!

 ok, so you have a few options:

1. delayed financing will let you use the new improved value but only allow you to take out what you paid for the property plus closing costs or 75% loan to value which ever is lower. This is often fine because the spread is not usually as big as yours but this would limit you to 59k plus costs here.

2. A double close.  The 12 month conventional seasoning is for cash out only, NOT rate/term. so what we do is give you a cash out loan at 75% in the form of a short term bridge loan out of our own pocket, our money our rules. We then turn around and refi you using the same appraisal and these are no issues because it is a rate/term refi. Gets your cash out and your long term financing with NO pre-payment penalty in place. 

3. A DCSR option with 6 months seasoning. The down side here is that you will almost assuredly have a pre-payment penalty. This can be VERY expensive when the bond market is signaling that we are possibly at the high point of rates. So, if they do come down in a few years the fact that it will be costly to refi is a serious factor to consider.   

Yes, as far as I know your loan can be ready to go, just needs to close/ fund the day after the minimum seasoning requirement.

My data may be outdated.   Maybe @Chris Mason has a sec to verify.

You've done extremely well.   I know it's painful,  but if you can sit tight for it to season it will save you soo much money and pain refinancing again later. 

Put a great renter in there and wait.  I think you will regret a quick sale.  Taxes are brutal and you will lose an important block in your wealth building foundation.  

 Yes, generally you will want to have the tenants in place. On occasion, the lender can go off market rents. but expect a little conservatism. But again, seems like your property has plenty of spread and will easily conform to the debt service coverage ratio at $1,300/Month. 

On DSCR you will see a rate increase or "penalty" if the property hasn't been seasoned for at least 90 days. Some lenders even require more.

Also - on a DSCR, you will need to have a tenant in place.

I don't believe you're going to find someone who will cash-out refinance you to LTV on whatever the AMC comes back at. Most will do the PP + Repair that you sunk into it, although looks like you have a pretty healthy spread so won't be capped by LTV.

If you are not desperate for the cash right this second, lease it out - wait until it's seasoned and than you will get better rates and cash out of it.