All Forum Posts by: Jon Puente

Hey Evan,

The only reason to start an LLC and purchase properties under that LLC is for limiting liability, meaning its harder to come after your personal assets should someone sue you. The only reason someone would sue you is because you have substantial assets, enough for them to want money. If this is your first rental, then it would not be worth it.

Right around 3+ rentals is when you should start thinking about an LLC. Transferring properties to an LLC is very easy to do with a QCD or Quit Claim Deed. If you are pursuing traditional loans, lenders want financing done in your personal name anyway. However, if you are purchasing loans with NonQM loans, then you can purchase under LLC.

Just buy your first rental with your personal name and start building that way! Keep it simple!

Hey Johnnie,

Anywhere that is not major metro areas, or right downtown.  There are TONS of areas you can get houses for 100K-150K that would cashflow at the 1% rule or beyond. 

Just depends on where you want to invest! Midwest areas have great options, but even southern states have great areas as well.

Hey Tracie, 

I think a lot of people are in your exact same situation, with equity at your disposal, but no plan for it.  Its a great place to be! I would say hang tight and do nothing right now until you know exactly what you will do it with the money. 

I would NOT sell, unless you were moving cities/states or had a big reason to sell.  

Doing a cash out refinance is most likely not a great move unless you had a plan to make double the return.  Even that can be a little risky.

Just sit tight right now until you have a real plan with the money.  "Where there is no vision, the people perish." Proverbs 29:18

Hey Tanner, 

I am a mortgage broker located right in Charlotte, NC! Been here for about 5 years and plan on purchasing our 3rd home in 2023.  Would love to connect (also a big soccer & basketball fan!).  Shoot me a DM! 

Hey Griffin,

You may absolutely use an Adjustable Rate Mortgage to purchase a rental. The only drawbacks right now is that lenders are not really being as aggressive on ARM products as they used to be. Meaning, a 30YR fixed often can get you the same rate as a 5YR or 7YR ARM, depending on the deal (credit, DTI, loan size, etc...)

A 10YR ARM will never beat a 30YR fixed with rates the way they are, so that would be off the table. Most lenders do not have a prepayment penalty on ARMs, but that would be something to find out upfront because that could be expensive if they do.

ARMs are a solid way to buy properties and are much more popular in the JUMBO space because of large loan amounts. The biggest thing I would be doing is negotiating seller credits in any scenario and using those to buy down your rate. I think that will have more affect on your than going ARM vs Fixed.

Hope this helps and great question! 

Hey Heidi, 

This is such a great question and I am sure a lot of people wonder about this.  

We made a special provision in our long term lease that they can smoke, but not inside the home.  However, I would not let someone rent by the room and smoke.  That causes problems for everyone and will save you hassle down the road.  Take your time and find a tenant who will abide by the rules and take care of your home.

More work upfront, but less work on the backend!

Hey Nicholas, 

This might be an odd one, but check with family members or friends! You never know what they have in the garage or basement and are willing to sell to you for cheap.  

Shoot, they might have been contemplating getting new furniture for a while and willing to sell you the old stuff in their house for cheap! Especially if you are offer to pick it up or haul away.

Just a thought!

Hey Jason, 

Unless there is a special program at a small lender for cash out refinances on INV properties, you will be capped at 75% LTV. The interest rate & costs jump significantly from 75% to 80% (should you find someone to lend that much), so I am not sure that is worth it for you. The only option to look for would be a NonQM DSCR program or something of that sort.

Let me know if I can help further! I am a local mortgage broker in Charlotte, NC.

Hey Cirilo, 

FHA loans are used for Primary Residences, so you cannot use them out of state unless you plan to physically move there too.

You could try a Conventional loan, hard money loan, raising private equity or do seller financing.  

I have to be honest with you, an FHA 203(k) loan is not as easy as it seems. There are a lot of regulations and requirements for it.

Great Question!

Hey Norris, 

I am not a "Bible Type Guy" or religious, however there is a really good line in the Bible from Proverbs 11:4 that says:

"Where there is no guidance, a people falls, but in an abundance of counselors there is safety."

I dont know your situation exactly, but the point being that maybe you jumped in without having options for a lenders, contractors, or just people helping you along the way.  Sure, there are some things that you cannot control, but not doing research will result in the things that you are saying. 

I appreciate this post because its not all flowers and roses! It takes hard work and dedication.