All Forum Posts by: Jerry Padilla

@Kelly Sams Welcome to BiggerPockets! You may want to add Charlotte NC to your post so investors that follow that tag can jump in. You can also pull in @Troy Knight who seems to be the one that holds these meet up groups. Hope this helps everyone grow their business! This is an excellent site to learn from others and make great connections that are essential in this business!

@Account Closed 

@John Gamboa Thank you for the mention and you are absolutely right that he should approach them with a pre-qualifying letter in hand to show he is serious about purchasing the property. 

@Andre Lewis one idea you can do as well is get a pre-qualifying letter stating that you are pre-qualified up to the amount that you are offering. For example, you offer $180k and you give them a pre-qualified letter stating that you can purchase up to that amount of $180k. It makes it look like that is the maximum amount that you are qualified for. 

@Omar Givens

DTI's are going to be a concern still, most likely.

Tax returns are used, if you currently own the property long enough to reflect on your taxes. If the income isn't reflected on your taxes than 75% of the potential rent is used and that is determined by the appraiser, and lease agreement. 

@Daria B.

@Padma Mody

You can do a rate and term refinance at any time, without any seasoning requirements for up to ten mortgages.

You can do a cash out refinance based on appraised value after 6 months from closing. This only work for the first four mortgages.......

At mortgage 5 if you pay cash at first for the property than you can do a cash out prior to 6 months, with delayed financing. 

@Daria B.

Livable condition includes things like the roof, plumbing, electrical, flooring, walls, ceiling, no peeling paint and cabinetry being in place and working order for someone to move in without a hazard etc. Cosmetics are not counted against you. Hopefully this helps. The assessment comes from the appraiser. 

@Daria B.

The house would have to be in livable condition to obtain financing. You wouldn't be able to finance rehab costs with conventional..... Maybe a local lender or private lender. If you have four or less mortgages including the subject you can do a cash out refinance based on ARV after 6 months of ownership.

@Andre Lewis

As others have mentioned.... you can't really go according to what they paid for the house. If you are getting a VA mortgage an appraisal will be done. If the house appraises for less than you can argue that the value isn't there and they need to walk away with a loss. I am looking at this subjectively, not trying to counter you, just give you the full picture. They may be walking away with a loss even at this price, if they only owned a year. They had closing costs to purchase they property and they will have closing costs on their end when sell the property. A 2k difference may be breaking even. I am sure they have done some repairs in the time that they owned it. I wouldn't focus on the fact that you think that they are walking away with a profit. Do you and your wife love the house? A VA loan will give you 100% financing as well. Do you plan to turn this into an investment yourself?

I am always glad to answer questions on VA financing.

@Alex Ballas

I would consider 10% vacancy and 10% for repairs.

You have thought this out well!

@Bon Khator

@Troy Kerr

Fannie Mae and Freddie Mac backed loans (Conventional) require the loan to be in an individual's name, and not an LLC. It will be very difficult to find a lender that will allow this and most likely it will be a commercial loan. You can quitclaim to an LLC after closing.... but this would risk the due on sale clause..... Although very rare, it is still possible. An umbrella policy is a great way to go. This is the route I went.

Why a mortgage broker? Typically , they have additional fee's including and origination fee and have less ability to assist investors as many times they are required to follow both Fannie Mae and Freddie Mac guidelines and can't stick to one guideline. This makes it more difficult to take into consideration the rental income on the property.