All Forum Posts by: Jerry Padilla

@Kara Courtney

Funding under $50k loan amounts gets difficult. Over $50k loan amount is possible, unless this property is going to be in an LLC? Portfolio lenders usually have higher loan limit minimums from my experience.

@Shemar Royal

FHA is a great product when you are able to meet the guidelines. How many units are you planning to purchase?

A SFR and a duplex you should be ok. Just keep in mind they have an upfront mortgage insurance and an annual that then stays on for the life of the loan.

A 3-4 unit requires you to meet the self sufficiency rule which can be difficult in higher cost areas where the mortgage will be high and rents won’t cover the mortgage at 75% of lease agreements.

There is also a portfolio product that I am aware of for primary home buyers that only required 5% down on a multi-family - but you have to be over conforming limits with this product.

Let me know if you have questions.

@Mauricio Quintana

Since you are purchasing a SFR and a duplex package deal and they have a lot of time left before their leases even expire, I would recommend starting out with traditional conventional financing. I am assuming these are not on the same lot? So they would be financed separately, then. FHA is only if you intend on living in the property. Investor conventional financing is 15-20% down on a SFR and 25% down on a duplex. You could then cash out refinance down the road when the properties are all renovated and rented out. For a cash out with the SFR it is 75% LTV and the duplex will be 70% LTV.

@Tim Lewis

As mentioned these are common owner occupied loans.

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An owner occupied conventional duplex loan requires 15% down payment and FHA requires 3.5% down. FHA will want an explanation on why you are looking to go from a single family to a multi-family.

@Cristine M.

Getting pre-qualified allows you to know what purchase price you can go up to. They are good for 90 days, so wait until you are ready to start looking at properties. But, I would recommend getting pre-qualified prior to looking, so you know what properties you should be looking at.

@Adrien Gonzales

The down payment is required on the purchase price. For example if you are purchasing a single family for $230k you can go as low as 15% down, which would be $34.5k. If this property is a multi-family, you would be required to put down 25% - 57.5k. There will also be closing costs that need to get paid as well as reserve requirements - depending on how many properties you own. The down payment has to be sourced from your own funds and the seller can pay up to 2% of your closing costs. These are all conventional requirements, if you are planning to put the property in your personal name.

@Mariah Destruel

That is a great way to get get in the game and how many investors get started, by house hacking. If this is a single family residence, than you can get a conventional 3% down primary residence as a first time home buyer. If the house needs too much work, or you want to finance the renovations, you could use a renovation loan. HomeStyle is one of them and is a good route to go with less out of pocket expenses.

To cash out refinance you would have to have an LTV of less than 80%, so I am not sure if you will have enough equity to cash out if you are financing most of the purchase and renovations.

@Alex Smith

You can start the process sooner than 6 months and close the day after you hit 6 months. It may be that lenders overlay. Let me know if you have any additional questions.

@Daniel Ditto

Personal name versus LLC makes a huge difference.

Using your personal name allows you to use conventional investment property financing. You can get up to 10 conventional financed properties and then need to move onto portfolio lending. The LTV for a purchase or refinance without cash out on a single family residence is 80 - 85% LTV and for a multi-family residence is 75% LTV. You can refinance these properties into a long term 30 year fixed rate loan. This way you don't have to refinance or have an adjustable rate mortgage.

With conventional a HELOC is acceptable to use as a down payment, but borrowing money or more than 2% sellers concessions is not allowed. The money must be sourced for 60 days in your account.

@Anthony Bates

The town assessed value has nothing to do with a refinance and appraisal of the property.

You can refinance the property and roll the closing costs into the loan - except for the appraisal. As long as you still meet the required LTV of 80% or less you can eliminate the mortgage insurance. I would also take your rate into consideration, and make sure it is reducing the rate as well. There must be a benefit to the borrower for a refinance.