All Forum Posts by: Paul Lyet

@Andrew Postell If simply about credit rating then I'm sure I would. What are the pros and cons of these types of loans?

Hello @Andrew Postell, Sorry for the delayed reply... Only a year delayed. Ha. I actually ended up buying the house cash down but I am looking at another property in Pennsylvania and needing the same advice. Would just like to do a traditional mortgage this time but have a feeling I'll be met with the same response due the fact this will be a rental property. Sorry if I wasnt clear about that the 150,000 home before. My original residence mortgage is/was payed off at the time of writing the original post. 

Please if you have any advice, let me know.

Back again and looking at another PA property. Just a quick update.. I did end up buying the previous property cash down and while it took a little longer than expected to find a tenant, overall things have been great.

So, I'm returning to see if I can get some advice, as the banks I spoke to in the past apparently made no sense. Is there anyone buying property in PA who lives out of state that can point me in the right direction?

Thanks,
Paul

@Eric Veronica I understood the same thing but was told by two smaller banks that their policy is to base loan on both value and income. They discussed with me the average rental prices for similar houses and determined that both of the properties would need to be mortgaged. I was a little shocked and honestly just pivoted to credit unions as they have been highly recommended to me. I’m about to just buy the property cash because truly a great deal, and work out how to get equity from both properties later. Is it a mistake or should I do a more traditional mortgage?

Hello, So the short of it is I have been having some trouble, actually a lot of trouble, getting CU or Banks to lend on an existing property I own in PA. 

I recently payed off my mortgage on what used to be my primary residence in PA. Now living in CA, my PA property has become a rental. I recently came across an opportunity to purchase another property in the same PA city but living in CA and trying to get a mortgage on a rental property, or HELOC on my existing property has posed to be a major challenge.

Bank mortgage - They wanted to mortgage both the property for purchase and my existing rental because they are calculating based in rental income and not actual property value.

HELOC - So I decided to try and get in with a CU and do a HELOC. I would only pull out about 30% and that would cover 50% of new property purchase. I would then cover the rest with cash. Own it free and pay back HELOC over a 3 year period. At least that was my plan. The credit Unions I've spoken to in CA describe this as a slam dunk loan that any CU would love to take on. But apparently they cant.

The Problem - CA Credit Unions dont loan for PA (at least non that i've found) and obviously not living in PA I cant get in with PA Credit Unions any longer. 

Can anyone give me some advice? I feel like I'm in a unique situation but I have to imagine there are rental property investors in CA working in the PA market. Would love to hear any thoughts on the matter. Would be greatly appreciated.

Thanks,
Paul

Hello, first time poster here. I wanted to reach out and see if I can get some advice on a loan offer from a local bank.

A little about my situation first.. I currently own what used to be my primary residence in eastern PA. I moved to Los Angeles in 2014 and put the property up for rent using a property management company. This was my first step into real estate and I quickly saw the benefit of owning rental property. Since that time I have been saving money, payed off my mortgage, and continued learning as much as I can about real estate investing while holding a full time 9-5. 

Recently a unique opportunity has sort of fallen in my lap where a good friend, also a real estate investor, has vetted a home in eastern PA but is now in a situation where he cant make the purchase, so he recommended I look at it and while it doesn't make the 2% rule there are other attributes that seem to make this a sound investment. (Shout out to the BP Calculators. Huge help)

So, my intentions were to find a local bank that would offer a line of credit on my existing rental and pull equity to cover half the purchase while I came in cash with the rest, allowing me to keep the payment very low and put all income from both properties to pay off the loan in the next few years.

Here are the details..

Current single family property appraisal is roughly 150,000 currently renting for $1299/mo
New single family property sale price is 108,000 and estimated rent of $1350/mo (Not currently a rental)
My hope was to put down 50K and pull remaining from current property equity then paying off within 5 years. I thought this could be done with heloc but bank is telling me that as a renal this is not an option.
Also may be worth mentioning that I will be purchasing this new property within an LLC.

What the bank offered was a strait mortgage loan 5.25% but based upon the rental income of the new property, estimated at $1100/mo based on zillow. I would have to come in with $59,000 unless I want to also put a mortgage on my current property. If I'm open to mortgaging both they can offer up to $106,000 where I would only have to come in with $2000 obviously. Would never do the latter but thoughts?

I would really just love to hear some opinions on this, preferably from PA investors if it matters. As of this moment is feels like I'm getting worked. I could be wrong but something feels very off with these numbers, and while that bank i'm working with has been great personally, the explanations to some of my questions have been somewhat ambiguous.

Also, I want to ask what type of loan is best for a situation like this and has anyone worked with any good independent PA banks? Not asking specifics just what should I be expecting?

Really any advice would be much appreciated and thanks in advance for all the great information from you guys in this bigger pockets community. I've been diehard on the podcasts for a little over a year now. Such an amazing resource.

Truly Thank You,
Paul