All Forum Posts by: Jason Wray

April,

If you need to protect your assets like large sums of money in your accounts, Equity in primary, equity in other homes it is wise to get an LLC. If you do not have a ton of wealth or assets the insruance on the property will do its job 9/10 times. Biggest thing to keep in mind is a lot of programs and lenders do not allow for a property to be titled into an LLC.

You can use a DSCR or Bank Portfolio loan those both allow for a an LLC to either close in an LLC or you can "Quit Claim" it after you close. The LLC just protects you and your assets from a injury claim from a renter. If this is your first property you can get by with waiting until you have 1-2 more again unless you have another business Non/LLC and Assets your trying to protect against a claim that exceeds insurance coverage due to one or more injurie(s).

You could always take out a personal loan and use some of the funds as the down payment. You would have to season some of the funds in a savings then to checking account for 3 months but is could be done. If you own a home you could take out cash through a refinance or 2nd mtg.

Other option would be if you do not own a home buy it as a primary and use a DPA program to cover the down payment.

Yes, you can use a DSCR loan not all lenders allow it but its done under a Non/QM program.

Rhea,

Once you contact the bank or lender you choose to refinance they order the appraisal. You cannot order your own appraisal or contatc the appraiser its now an AMC managed task under the Dodd/Frank rules. Simply pick a Bank or Lender and during the processing we order appraisals through an "AMC" Appraisal Management company".

Sharma,

Any reason you want a Heloc over a cash out refinance.  Rates are coming down right now and a cash out refinance offers additional benefits that a Heloc cannot not offer.

Heloc cannot be used as an "Asset" or for PITI reserve requirements when buying another REI.

Heloc is an open end mortgage aka debt obligation and can cause DTI issues.

Heloc is in 2nd lien position which means you cannot borrower more until you pay off the Heloc.

Cash out refinance offers a 30 year versus Heloc typically 15-20 year higher rate.

Andrew,

Feel free to send me a message or reach out I would be happy to talk REI and offer some advice from a few different angles.

Villy,

Do you buy "All cash" and then do Delayed Financing to pull out the 80% LTV on price & Rehab or do you wait the 6-12 months.

The Oregon Coast is a little more friendly and the STR market is very cash flow positive. You also have Florida which is where I reside in Pinellas County. Beach front properties on the Gulf of Mexico side are Hot in terms of STR/VRBO. Beach style cottages, Duplex (2-3 units) are the go to either on the beach or opposite side which is also the intercoastal side.

Adam,

My advice from a Banker/Lender point of view is if you can buy it as a vacation home it will only run you 10% down. Great thing about a vacation home is it can be rented out as an STR and there is No prepay. You can refinance in 12 months and transition it into a full time LTR and if the LTV is there pull out some cash.

If you can find a 2-4 unit near the beach that will run you 15% down as an investment. I am over here in Saint Petersburg and there are a lot of duplex/beach cottage homes available. The VRBO over here is through the roof but so is Panama for the most part. You have a lot of condo's available as well but the HOA's and insurances are making it tough to cash flow.

Sol,

If your credit union is capping you on your loans which is very typical, you need to check out another bank. Credit Unions have overlays and very strict guidelines and that is bad news for a real estate investor. When you refinance and take cash out you want to typically do a Max LTV cash out so long as you cash flow.

In order to grow efficiently you need to make sure you are using a Bank/Lender that is investor friendly. Your future in real estate should be mapped out with you banker who can help create the best path. Conversations a head of time can help save time, money and avoid limited options.

If you can maximize your cash out funds to buy more doors I would encourage that to build a bigger REI portfolio. As far as other banks you will also find out bigger banks offer better options like less down, Higher DTI options and more programs.