All Forum Posts by: Ko Kashiwagi

1. Creative finance - seller finance or subject to. These strategies are honestly not in the realm of "passive investment" any more though as it takes many offers.

2. Go for projects that needs rehabs and get into flips/BRRRRs. You can go as low as 10% down and there are programs that allows this for first timers with good credit.

3. Save 20% + 6 months

How much equity does that house have? Any chance you can pull second position?

Structural engineer is definitely first step as Mason mentioned.

It totally depends on liquidity, risk tolerance and time. If it costs 50k and you have 50k, you'd have to have a high risk tolerance and time to do this. If you have enough money but your business is the main driver of income in most cases you can make more money putting time into the business.

You could also get creative here. Maybe partner up with a local flipper on the renovation, split the profits after the sell and move on.

Hi Andrew,

What does your and your partner's income look like? You might be able to structure it to still qualify for conventional loans. For example, if your partner has income and no debt, perhaps you can invest through her, or if it makes sense to combine your income with her that might still get you below 50% DTI. Best to check and see first.

Most DSCR loans go off of the middle score so it'd be good to get a soft pull as I've seen scores come in way off from those apps sometimes. You can find a lot of. lenders through the "find a lender" tab above!

I would get a mortgage statement and payoff statement to get an exact idea of what you need to do to get current. You can double check the info by calling the lender/servicer

Hi Troy,

It depends on each deal. Sometimes the programs that allow vacancy has the same or even better rates. It's a good idea to always line up and get started early so you have options!

What's the occupancy rate and the estimated value?

Is it classified rural?

https://www.consumerfinance.gov/rural-or-underserved-tool/

Agree with above. The interesting thing is appraisers don't often realize or give huge credit a new plumbing, new electrical, new HVAC despite these items being very expensive. That's not to say these items shouldn't be fixed but they are repairs that beginner investors tend to not realize isn't adding that much to the ARV.

Hi Zhengyang,

Conventional loans (residential) look at your personal income (like tax returns) while DSCR loans (business purpose) look at the rental income. Yes, in states like CA you can often find better leverage using conventional loans and this is a strategy that can be employed. However, it is important to note that if a leverage you're looking for doesn't qualify with DSCR, it means that your cash on cash return is negative (because it means your NOI or Rent is lower than rent -in most cases).

So if you want to maximize leverage and are less cash flow sensitive (okay being negative), then conventional makes sense. If you want to vest under LLCs and not affect your DTI, you'd generally want to go DSCR.