All Forum Posts by: Jason Wray

I would use the $1M to open and promote a "Legal" Psychoactive clinic for Veteran PTSD, Drug addiction/Withdrawal Marriage/Divorce therapy on the Oregon Coast. This market is currently projected to surge past a $7-Billion dollar industry and is already on a 6-12 wait list at some clinics. Market Globally and heavy to Hollywood provide a top notch experience at a beautiful rocky coast cliff style home on the Oregon Coast. You can buy a luxury home on the OR coast right now for a fraction of the cost compared to California.

Would make a impactful experience and with the combination of the therapy help millions of people, while making Millions a year!

You would really need to evaluate the its economic feasibility but 20,000 acres flooded sounds like a nightmare and a project that will break the bank.

The cost of the dirt and gravel alone to elevate that land plus environmental issues or sinkholes may also hold up completion.

Just remember anything below ground cannot be used as GLA. The appraiser may give a gross adjustment but not for GLA. Only reason I mention this is because I see it every day when an owner finishes a home and finds out certain renovations did not add value to the appraisal.

There are also multiple appraisers who tend to leave out certain repairs or renovations on the positive gross adjustments because the comparable sales are all "Apples to Apples". Most appraisers use "Closest in proximity & Closest in sale date" which usually offers a lower value. Rather than utilizing comparable versus cost of renovations and overall curb appeal.

As an example I had a customer put $40K into a home new kitchen, finished basement and floors. The adjustment to value was $30K on the report so he did not get any additional equity and fell short on his costs to renovate. The appraiser noted the repairs/renovations transferred the home back into current market analysis from inferior to average.

Just trying to bring light to any unforeseen costs to help but if your adding sqft or rooms above ground you will be good on that angle. Do you plan to pull cash out on the ARV/

Patrick,

In this market interior upgrades like kitchen, bathroom and every day cosmetic renovations offer very little increase in appraisal or ARV value in general. Appraisers are hell bent on not doing much of any gross adjustments to increase the homes price unless you added Sqft/GLA. Converted a garage into a bedroom & bathroom, added a below ground pool, ADU/mother in law suit, raised the overall construction C2, C3, C4.

Just be careful on what you spend versus what you want to get back because most kitchens are like brake pads at some point it's just a required replacement. If your tenant burns down the house you will only get replacement cost unless you hire a public claims adjuster.

Try not to negatively impact your cash flow with high insurance costs if not warranted.

The lowest I know of is $75K minimum after down payment so the purchase price must be $93,750.00 or greater. DSCR is really the only option because it is a Non/QM program and High costs does not apply. You can get a persoanl loan for $50K and use part of those funds to buy at a higher price range.

Conner,

I would tell you to sell the SFH for a few reasons first it sounds like its a bad investment due to the age and work still needed. Secondly mortgage rates are coming down as of this week and by 2025 they will be attractive enough to buy again. Last but most importantly you and your wife are having a Baby always prepare for that "What if factor"

Take any cash from the sale tuck it into savings and rent in a reasonable spot "Close to family" if possible because they come in handy with newborns. Keep the townhome rent it out and use the cash flow and future equity for a rainy day. Down the road when you are ready pull out some cash from the townhome for another down payment on a property.

Dennis,

Biggest thing is anything 5+ over 4 units is considered commercial and will need a DSCR or commercial loan. DSCR will "only" use the rents of the property to qualify no personal tax returns or income are used or needed. You will be looking at 25% down versus 15% with a 2-4 unit MF.

Depending on the State/County taxes may be not that far off just depends.

Rates on 5+ units are not that bad because your putting 25% down and if you select a 1, 2 or 3 year prepayment penalty you can get a lower rate. keep in mind rates are projected to be back down in 12-24 months so a 3 year or more prepay might have you locked in missing the refinance options to lower payment and cash flow higher.

Park City is a great STR location and a solid long term investment. Have you thought about not selling the other property and instead of going 1031 exchange just put 10% down since its a Second Home. Do you have the option to pull cash out on a refinance or LOC and use the tax free cash to put 10% down and save the other property to continue to build doors.

Just a heads up The program has been live since announcement you can originate but not close until after Nov 18th. I am not sure if you are aware but any FDIC Bank that is "Fully Delegated" as a Direct endorser can make an exception on both DU/LP on approve and Refers. Rents are seen under these circumstances as case by case.

I also have no issues with getting MI right now with a Fico under 700 so maybe you are using a specific MI company or again have overlays.

Nolan,  Just so you know It does not matter if this is your first time buyer or not you qualify for the 5% regardless and you can "always" use 75% of the rents.  Just be careful of other lenders or brokers if they have overlays that require you to have landlord experience walk away.   All of the Big Banks allow the 75% regardless.