All Forum Posts by: Jason Wray

Shane,

Reach out happy to talk.

Amar,

If your only looking at single family that might be the reason for the lack of cash flow. Especially if you are buying in an area with high taxes, HOA and larger loan size. The only way to really make a dent is to consider Multi-family rentals where they provide 2-4 units. More doors, more cash flow and helps offset the PITI payment to increase passive income.

You mention your "Area" does nto provide a particular criteria to meet the threshold. Have you considered looking outside of your area and use a management company. You can also get into an investment rental SFR or any (2-4 Unit) with 15% down and No mortgage insurance so make sure you shop around.

The best way to avoid having to source where the funds came from is to deposit them 3 months prior to the application. All banks require (2) months of bank statement to show where the down payment and the PITI reserves funds are located. Funds can come from a gift from family or from a business partner who is a co-borrower on the loan. Where it gets tricky is when it comes from an "unkown" source where it cannot be sourced and seasoned.

DSCR allows for gift funds, funds from a partner, funds from an IRA or 401K but they will require the terms and conditons sheet to see what the penalty for early withdraw would be to add it inot the DTI - Debt to income. There are a few loopholes if your Banker or Loan officer know what they are doing and how to submit the file to processing to avoid an underwriter decline/denial.

Sean,

You do nto need to wait 6 months if you are purchasing all cash.  You can opt for a Delayed Financing which allows you to take out 75% of the purchase price plus any repair or renovation costs with proof of receipts.

Andrea,

Townhomes have Pro's and Con's and on the postive side they are managed through the association.  You do not have to worry about landscaping, exterior renovations/repairs or up keep on any pool or amenity. The taxes are generally lower and the insurance is under an HO6 policy which is cheaper than hazzard insurance for detached homes. 

The negatives are HOA fee's that can be higher due to lack of reserves or constant repairs etc. There can also be renter shock if there are other renters/owners who do not keep up their property, play loud music, or pose as a problem in general causing renters to leave.

I would run the numbers on the townhome versus a SFR or other multifamily options to see what the numbers look like with No HOA fee. More doors offer more cash flow and with having 20% down you can get into a SFR or any 2-4 Unit multifamily rental. I would look at apples to apples in regard to sale price.

You can be on the loan as a non-occupant co-borrower and the "other" person can use their 10% down.  You can also buy a second home with a partner or family memeber and again use their 10% down or assets.  There are a few ways to set it up to avoid issues.. You want a game plan before you get into the application stage because it can cause issues redtape and be declined if not set up correctly.

Christopher,

If you are on title you can refinance it into a DSCR or true portfolio investment refi. If you do not need cash out Portfolio is the best option or if cash is needed going DSCR is the best option to close in an LLC.

Jacob,

When you refer to "checklist" do you mean financing or all steps in general. In case you meant from start to finish I would say get your Pre-Approval up front for the mortgage. Consider looking at both Portfolio Program from an FDIC bank as well as DSCR.

Ashley,

Do not forget to look into other loan programs as well where SE seasonig is not a factor, You have the DSCR program, Bank Statment program, and No Ratio programs. They do require a little more down than 3.5% like FHA. But they can be done for 10%-15% down and in some cases can get you into a rental sooner than later.

You also do not need 2 full years for VA & FHA there are loopholes.

Send me an email lets connect.