All Forum Posts by: Jason Wray

Jennifer,

Check out my profile and send me an email I would be glad to help show you why this is happening and put you on the right track.  

Ying,

First before you give up your hunt and settle into a good book, I would encourage you to look at other states.  You mention Phoenix and I do a lot of business there but I have noticed two things over priced homes and a shortage of inventory.  The shortage of inventory is mostly good deals on 2-4 unit multifamily rentals.

My other states I focus on that perfrom well are Indiana, Ohio, and Tennessee for the best bank for your buck.  Indiana for example has exploded over the last 12 -24 months and its becoming a favorite state for most of my California and New York investors.  Main reason is you can still find a Duplex (2 unit) for under $200K.

Most of these homes can pass an appraisal and offer an immediate cash flow but most of all huge ARV potential. There are far to many neighborhoods to list but Indianpolis and Dayton have been on top for IN & OH. Have you looked into these states if not I would suggest pulling up IN or OH for example and checking out either ZIL or Truli.

Use your filters to narrrow down the price ranges, home types and listed for sale exclude manufactured, Condos, townhomes and Land.  Use a range from $100K to $250K and select single family and Multifamily.  If yu ever have any question on other states or just want to connect feel free to send me an email or check out my profile!

Nicholas,

If you want to open an HML Hard Money Lending company you do not use your own money. You first set up an LLC, get your EIN number, open up a Business checking account then you need to get approved for a license, obtain a Surety bond, and several other steps. If you want to use your money you can be a "private lender" but it only allows you to have a few loans at a time.

You are better offer taking $250K and spreading it out over 8-10 rental property purchases depending on what state you live in or buy in to maximize that capital.  You can also focus on buying "Subject to" properties that cannot pass an appraisal and buy them "All cash".  Then renvoate the home and do a "delayed financing" loan to get 80% of your funds out right away without having to wait the normal 6 months title seasoning.

Having $250K cash means you can double that money in 6-12 months with the right purchases, renovations and either refinance or sell. If you sell you will have to use a 1031 exchange to avoid the capital gain hit but it lets you buy another home fast. This method above also carries 100% less risk versus trying to use $250K as a private lender or sink into a HML startup.

You are 20 years old so my advice is to have some more conversations with industry professionals to avoid lost time and money.  If you ever have any questions about banking or investing feel free to reach out or check out my profile.  I am always happy to help other BP members and sounds like you are Military member and that is also an investing golden ticket if you use your DD-214 or certificate eligibility correctly.

Blake,

All good questions and you are in a good position to buy an investment property to start building your real estate portfolio. First piece of advice that I give to all of my new investors I coach is get your Pre-Approval. This will allow you to see what programs will save the most money on the down payment and still maximize cash flow.

The Pre-approval lets you check your buying power and the Banker can help you understand which one makes the most sense. Most real estate agents will request a pre-approval letter before they show you homes in most cases.

You can typically ask the Banker or Loan officer for a realtor they use in the county that deals with investment properties. There is a big difference between a realtor who specializes in mostly primary homes versus investment homes. You want to work with a realtor who knows the home value, ARV potential, Local rents, and aggressive enough to get a good price and possibly even seller contributions.

The Banker can also help you run the numbers on payment versus the rents to check cash flow up front. You can also look at ARV options prior to buying the home to see how much you can take out on say the refinance in 6 months to pull out cash for another properties down payment. Once you understand and get comfortable with the BRRRR process it can become a little addicting!

If you have any questions feel free to email me or check out my profile, I am always happy to happy to help other BP members!

Harvey,

I would love to thise available for Bankers and Loan officers!  I would love to have more quality leads and be able to talk to more people looking to buy a home and save more money!  I find it hard in todays market to find good leads that are not sold 5 or more times and are aggravated due to excessive calls. 

This caused me to stop buying leads but there are a lot of good people out there looking to save money and talk to someone who can get them approved without the hassle.

Do you know if that platform exists for that type of lead?

No, Commercial loans do not count as conventional "residential loans" but keep in mind not all banks. credit unions or lenders allow you to have 10 conventional loans. There are some banks/lenders that will cut you off once you get to 6-8 properties even if you DTI is in line.

Once you hit 10 loans if you get there or close to 10 around 8 for example you will want to start looking into a "Portfolio loan" which is a true commercial loan.  That loan is also kown as a "Blanket loan" where they take usually 4 doors or 4 properties minimum and they blanket them all into one (1) commerical loan, that 'Does Not report to credit.

That will free up all or some of your mortgage trade lines to start all over again so you can use conv/traditional loans. You also have the ability to get 6-8 loans and then switch to Non/QM and get some DSCR loans for investment rental purchases.

You will also find it very hard to get 8-10 properties if you do not have a good "Investment (REI) CPA or Tax preparer. Some CPA's really hurt RE investors who have multiple properties by crushing their NOI and net rental income on their Schedule E. Shedule E, Scheduel C's and your overall net income are crucial in keeping your DTI in line and allowing banks/lenders the ability to use Maximum personal, business and passive income.

Fred,

DSCR is for investment only you cannot use it for primary homes. If you are going to move out and can list the property as intended use "Investment rental" it can be done. Keep in mind they will want to see a rental situation set up and verify because the underwriters are trained to look out for this type of situation.

If you do not have income like W2 or 2 years of 1099 SE to show you are not going to be able to get a "Construction/Renovation" loan done. DSCR or Debt Service Coverage Ratio is used for investment rentals and commercial loans so that you can show the rents are equal to or greater than the PITI or ITI payment.

My advice would be to use a cosigner family, friend or business partner to help satisfy the income/DTI ratios, if you cannot use your own income. If not move out and use a DSCR refinance to take out some cash if you have equity and do the renovations with the funds.

Richard,

Have you tried to use Facebook Marketplace yet if not you can find some for sale by owner homes for sale as well as vacant lots. If you are running into a lack of inventory or home prices that are over priced to just overly expensive try other states.

It's becoming a fast growing trend buying out of state to find a better deal on properties that cash flow. I deal with real estate all of the country and right now I have seen states like Indiana, Ohio, Georgia, North & South Carolina all being bombarded since you can still find a duplex for example under $200K.

If you want to buy a single family you can also use creative financing and use a Second Home loan program which only requires 5% down. Those are easy and great to use when buying out of state to save more money. You can always transition them or refinance them down the road into a full time rental.

Feel free to reach out if you have any questions I have a lot of connections in all of those states above for agents, other investors.  

Anthony,

Yes, and my advice is to make sure you get more than one quote when it comes to a VA Home loan and using your entitlement. I have seen many lenders not run the numbers correctly and it ends up hurting your Maximum loan amount you qualify for and that never a good start.

You also want to make sure you are working with a seasoned real estate agent who specializes in VA home loans. Biggest reason is some agents do not like FHA and VA out of simple ignorance and think its a hard loan to get approved. I have seen many realtors decline the borrower in certain markets especially in LA because they prefer to work with only conventional or all cash buyers.

There is also a more aggressive approach to take as the agent because a Veteran should not be paying closing costs and an agent who works with Veteran can get you "Seller Concession" in some cases up to 4% which can cover all closing costs and a rate buy down! Most lenders will not offer this type of help or even suggest these things and simply run a generic "Pre-approval" and email you a letter.

Instead with VA 100% loans it is wise to have the bank/lender runs an "ELA" Express Loan approval which is an actual underwritten guarantee to close in (15 days) or less. This enhances the Veterans bid and can help your offer get approved even over a cash buyer since you have a quicker guarantee to close in only 15 days.

If you ever have any questions about the VA process or anything above feel free to give me a call. I enjoy helping BP Members and Veterans avoid lost time and money and getting it done right on the first one is crucial.

Anthony,

Yes, and my advice is to make sure you get more than one quote when it comes to a VA Home loan and using your entitlement. I have seen many lenders not run the numbers correctly and it ends up hurting your Maximum loan amount you qualify for and that never a good start.

You also want to make sure you are working with a seasoned real estate agent who specializes in VA home loans. Biggest reason is some agents do not like FHA and VA out of simple ignorance and think its a hard loan to get approved. I have seen many realtors decline the borrower in certain markets especially in LA because they prefer to work with only conventional or all cash buyers.

There is also a more aggressive approach to take as the agent because a Veteran should not be paying closing costs and an agent who works with Veteran can get you "Seller Concession" in some cases up to 4% which can cover all closing costs and a rate buy down! Most lenders will not offer this type of help or even suggest these things and simply run a generic "Pre-approval" and email you a letter.

Instead with VA 100% loans it is wise to have the bank/lender runs an "ELA" Express Loan approval which is an actual underwritten guarantee to close in (15 days) or less. This enhances the Veterans bid and can help your offer get approved even over a cash buyer since you have a quicker guarantee to close in only 15 days.

If you ever have any questions about the VA process or anything above feel free to give me a call. I enjoy helping BP Members and Veterans avoid lost time and money and getting it done right on the first one is crucial.