All Forum Posts by: Jason Wray

Credit Unions usually do not offer DSCR loans you want to use a NON/QM lender or Bank. DSCR is not a QM mortgage so most credit unions do not offer that type of debt service loan.

If you can qualify using income I would suggest using a portfolio cashout refinance or just a conventional refinance.  

Raju,

DSCR loans carry a broker fee since they are a NON/QM style loan. Even if the Bank/Lender is Mini-C they still have to make their 102-102.5 bucket. What that means is your going to end up getting hit with a 2-2.50% origination fee. When you factor in the other closing costs title, escrows, days of interest and hard costs, you are close to $8K (total).

You should not be paying $8K in points though that would be excessive even with Non/QM. Keep in mind this is a type of "No Doc" loan so its not a cheap route to go DSCR. If you are on a work visa they might be hitting you with foreign national which could cause other rate hits.

In my opinion it’s not a bad idea for two reasons - one it never hurts to jump into a pre-approval and make sure that you are 100% covered from all aspects. It give enough time to correct anything that may pop up which could be credit not just scores but trade lines, dispute, something reporting in error etc. Plus it allows you to have an in depth conversation with the a banker to talk about all of your options.

Discuss single family versus 2-4 units talk about your income qualifications as well as other units rents as an option to expand on the purchase price. Discuss other markets and have enough time to evaluate cash flow/ROI perspectives. Most approvals are good for 120 days but can easily be refreshed and always good to have the approval letter in hand in case something promising present itself.

Natasha,

The term "First Time Home Buyer" and DSCR do not go together because DSCR is not for primary homes. If you are looking to buy a primary home you cannot use DSCR instead choose FHA, Conventional or Portfolio (Banks private funds). If you are buying your 'First investment" home where you will "Not" occupy the home then Yes DSCR.

DSCR is used for when a borrower cannot show income or their DTI is too high in most cases. If you want to buy a investment property you can put 15% down on single family or even 2-4 units. Primary you only need 3.50% to 5% unless it's a Jumbo loan over $1M then 10% would be required.

Adam,

Interest rates are currently in a down trend due to FED's easement and market data. Make sure you are shopping the APR not just the rate. If you are getting quotes make sure you look at the points or origination fee's being charged. Some lenders and brokers hide the fee's/costs in the term 'Discount for rate chosen".

Thats just a hidden statement that shows the costs paid to the broker/lender in terms of margin or Loan officer compensation plan a.k.a commission.

If rates are dropping you can get into a mortgage with (No buy down) and (no points) and simply refinance when rates bottom back out or hit a tangible benefit to refinance for a lower payment.  Most buyers right now will more than likely refinance by 2025 for a much lower rate so the points paid for a lower rate might be a wasted expense if you can refinance in 12-24 months.

Dillon,

If you are going to use  a Bank/Lender you want to make sure you are focusing on certain requirements.  Due to guide lines most banks and lenders have guide lines that require a few things.  MH must be a double wide, In Florida must be on a permanent foundation/concrete slab, and have hurricane tie-downs.  Must not be older than June 1976 while other lenders want to see something less than 20 years old.  

MH cannot be moved from another piece of land must be brought in by builder and axles removed. You will also need a foundation inspection report in order to pass all the above as well as inspection. All in all Mobile/Manufactured can be a great investment since they are in most cases 50%-60% less than a SFR build from ground up.

If you are buying as a primary you can include the land into the sales price if you locate a lot and want to put in a MH.  Rents in some cases do not seem to be effected unless the MH is much smaller than the local comps.  I am here in Saint Petersburg, Florida and Manufactured homes are all over the map.

Stay away from buying mobiles or manufactureds in MH parks where the lot is rented.  There is very little money in those unless you are buying the mobile home park.  You can make money but there is a little more of a hassle collecting rents due them being transient in nature.  

Dawson,

All great questions my first piece of advice would be choose a Bank/Lender and fill out an application. Getting a Pre-approval takes all of the questions & concerns out of the equation by telling you exactly what you can qualify for up front. Based on your income, and credit it should not be a problem to qualify. FHA is a great options and you only need 3.5% down but there is also Fannie Mae 5% which can save you a little more money.

When you purchase a 2-4 unit as a primary you can also use the other rents/doors to qualify. We use 75% of the rents to add to your income which can help buy a more expensive multifamily.

You can buy a rate down which lowers the rate & payment so it does offer the option to qualify for a higher loan amount. Your partners income can only be used if they are added to the loan as a borrower/co-signer.

Wyatt,

Sometimes you have to look at the bigger picture instead of the short side.  If you purchased it for say between $100-$115K how would it benefit your business and sales.  If you will increase sales calculate your cost recovery based on time frame. 

If this person knows you want/need it to increase business he does have the upper hand.  Have a conversation and explain you found a better location that offers a higher traffic.  Tell him you might be moving maybe he will rethink his offer if he thinks the interest has declined.

 Sure can if you look at airbnb an average 2 BD runs for $170 a night.  Long term rentals are going to go to the growing families in the area not yet ready to buy.

 Aaron,

Depends on where in St.pete in certain parts you have a higher grouping of 2 units by St.Pete Hospital for example. Great area for higher rents and cash flow on a 2-3 units closer to the hospital and 66th street. Go a little further SW and you are closer to Jungle Prada and Park street higher rents and higher values. Depending on where you buy a VRBO/STR could be just fine for a SFR.

I am in Seminole and thats another dynamite spot depending on price point but again closer to the beach.  Feel free to reach out if you have any questions!