All Forum Posts by: Keira Hamilton

I really like house hacking as an option, especially for new investors. But, you're right, the income piece is very important. I'm not familiar with this strategy your CPA is suggesting. It would be legit, I just haven't heard of it. Curious to hear what others think.

I would recommend looking into investment properties. With a commercial loan, you can go the DSCR route. Basically, what that means is that lenders will be looking at the income or potential income of the property, not your personal income, when determining the loan terms. The only personal financial piece they really care about it your credit score.

Hi Taylor. Something to keep in mind is that financing for distressed properties is going to be more challenging if you're new to investing. Lenders want to make sure that you're going to be able to pay back the loan, and for rehabs that's dependent on your ability to achieve the ARV and get it rented out at a market rate. You'd probably have a pretty good shot at getting financing for a minor cosmetic rehab, but anything major (tearing down/adding walls, anything structural) will require direct experience within the last 3 years.

That's not to say you won't be able to find properties with value add opportunities. You want to look for properties that are in good enough condition for a lender to approve as is, but might just need some sprucing up. Some paint, maybe some new flooring, a few new fixtures, and updated landscaping can go a long way and still be cost efficient.

Hey Stephen! If you're talking about purchasing an investment property, you won't need to show income returns. With a DSCR loan, the only personal financial information lenders really care about is your FICO. Rather than focusing on your personal income, they're focusing on the income of the property to ensure it can cover the monthly payment. There will sometimes be a rate increase for non-US citizens, but you could always use your wife on the application.

Hey Andrea! When you say the rents don't support current interest rates, how far off are they? Have you been able to calculate the DSCR?

Hey Matthew. Do you have any experience in construction? For a full tear down and rebuild, most lenders are going to want to see that you've done a similar project before.

You would have to decide if it's worth it to you to refinance since you won't be getting close to a 3.5% rate on a new loan. You mentioned consolidating other debt - perhaps that's at a high enough interest rate that refinancing at current rates would make sense, I'm not sure. Or maybe you find a property with strong enough cash flow that refinancing in order to purchase it works out in your favor.

Hey Arpit! Interesting scenario to consider. A few thoughts I have: Losing $4k a month feels pretty high, especially if you wouldn't be moving back for a couple more years. That could be almost $100k that you could have saved for your next investment. Of course, you'd be building equity in a property during that time, so it's just a matter of how important liquidity is to you right now. Can you afford the $4k a month? Would you be able to afford potential vacancies at the California property? Considering that you're currently out of state you would also need to consider finding a good management company who would be able to find strong tenants and keep it occupied.

I understand the FOMO. Prices are down here in the Bay, but it's hard to tell how long that will last. At the same time, it seems like Option 2 would allow you to build up more capital over the next couple years while also building equity in the Knoxville properties. I would lean towards Option 2 personally.

The biggest issue is that most lenders aren't interested in pre-fab as it's really hard to resell those loans. You might be able to find a portfolio lender. I reached out to some of my contacts and couldn't find someone interested, but you may have luck there. An unsecured personal loan would allow you unrestricted use of funds, but I don't think that would make sense at the dollar amount you're looking for - I think you'd have to scale a lot more slowly.

If you own another property, another option could be leveraging that, although depending on your current interest rate a cash out refi might not be ideal at the moment.

Typically for new construction lenders will look for previous experience with a similar type of build. They want to make sure you'll be able to be successful with the project and pay back the loan.

Where's the lot and what kind of LTV are you looking for?