All Forum Posts by: Jon Puente

Hey Daniel, 

Not really, I would just list like normal.  The benefit to do seller financing for buyers is that they can create their own terms.  The only thing that benefits the seller is the purchase price because you can normally get a little more money (selling at a premium), but in return, the buyers are going to want something back aka creative financing.

The terms are normally less money upfront (aka less down payment) and the lowest rate possible.   No one is going to give you 100K as a down payment using seller finance.  For subject to, the buyer would have to end up getting a good deal on the home, enough to be able to make equity.  Subject to deals are normally people who cannot make their mortgage payment or are in a tough life situation.   Also, on subject to, the mortgage stays in your name for at least a year, so that could mess you up down the road. 

Keep it simple. Sell your home like normal and list with a realtor.  Take your money and move to the next home! 

What I mean by this is that when COVID happened, the government was sending $1400 checks and unemployment checks to people every month.  When you print money out of thin air and add it to the supply of circulating money, there is more money (more supply).  When there is more supply of something, the value of that something goes down, which means it takes more dollars to buy the same goods.  Hence why real estate values grew massively. 

Hey Jarreau,

I would just call your insurance provider and let them know that your property is no longer a primary residence, and you are current renting it to a tenant full time.  They should be able to flip it to where it's a landlord policy, and not both.  You do not need two policies in place, only one. 

The mortgage company will not report a due on sale clause, because you are going to keep insurance in place, it's just going to be a landlord policy for investment properties.  Very easy to do. 

Tip: ALWAYS require your tenants to carry renters insurance for their personal belongings. 

Great Question!

Hey Brian, 

If your dad's first home does not have your name on the deed, you cannot personally refinance it by yourself. You have to be an owner of the property to refinance a mortgage loan. 

Now, as far as buying a rental, you do not need an LLC. As a general rule, I only recommend getting an LLC when you have 3+ properties. Just buy the home in your personal name, using a Conventional loan with 15%-20% down (as long as you qualify with your personal income).

You need to reach out to a mortgage broker or lender in your area about what you need for an Investment Property Conventional loan.  Hint: It's not much at all.

Great Question!

Hey Brandon, 

I would not do a cash out refinance right now with rates being the way they are. I would only consider cash-flowing the renovation out of pocket and it may take a month or 2 longer, but a HELOC can be dangerous depending on how much renovation you do. However, if you need financing for the renovation, then your best options are to do a fixed rate equity loan or HELOC.

If rates drop in the future, you can do a cash out refinance and decide if you want to subordinate the HELOC or pay it off entirely with the cash-out proceeds. Most people just pay it off with a cash-out refi because it's a variable rate, and it's less hassle.

Great Question!

Hey Amby, 

This is a great question and really depends on location of real estate, but I will do my best to explain.  Although the world population may decline or just grow more slowly, that does not mean that the United States economy will slow, nor does it mean home prices will drop. 

Like most things in the world, values of things are based off supply and demand.  Right now, there is a shortage of home supply, meaning builders cannot build fast enough to meet the demand of people who want to buy a home.  Likewise, more and more people are keeping their homes as rental properties, thus leaving none for first time buyers to become homeowners, especially if they have historically low rates.

Also, given that the government pumped trillions of dollars into the economy while shutting down factories and business, that also explains why prices should stay elevated indefinitely.

The problem is that for real estate to decrease in value, the human population would have to be cut in half (exaggeration to make a point).  Or half the population would have to be jobless, or people would have to be fleeing the United States at a rapid pace.  None of which are the case.   

As long as people need places to call "home", then real estate will forever be growing in value.  Again, not every location will see high growth, but real estate will never again be at 2008 levels or even Pre-Covid levels. 

Great Discussion!
 

Hey Eddie,

You would need to become knowledgable in an area of real estate to provide value. I would start by going to Youtube.com and learning everything you can about STR and MTR, and start reading books as well. Or you can ask people who are already doing it in your area, and you can try and shadow them.

As far as getting into buying STRs and MTRs, you need some type of capital to start.  It's very difficult to buy a property with 0 knowledge and 0 money, so I would find a job to get some money rolling in and then binge on different information sources. 

Its not just going to fall in your lap, real estate is much harder than that. 

Hey Tim,

I would just have a real estate agent run comps for you, or just look at real estate within 1 mile of your property that has similar attributes/factors to determine property value. 

Yes, the 75% LTV max cash out is based on the value of the property, so if your property is worth 200K, then you can take a maximum cash-out of 150K.

I am not sure what you are asking in the last question, but you would have to determine a hypothetical payment (so lets say 1500/month including taxes and insurance based on loan amount of 150K).  As long as your gross rent is 1500/month then you would be at a 1:1 ratio which is good! The higher the better for rates, and the lower the worse for rates.

Hey Josh, 

Yes, all lenders who offer conventional loan products will be able to do 10% down on Second Home. I am a mortgage broker and will just give you a heads up that your Down Payment (aka LTV) will matter A LOT right now with getting a solid rate.

Depending on what state you are looking to purchase in, I might be able to refer you!