All Forum Posts by: Lorenzo Prieto

I'd certainly recommend getting other quotes just to be on the safe side. I recently had an inspection done on a property that I'm purchasing and found a cracked pipe that runs under the driveway. It will require concrete removal to dig down and replace the pipe and the quote from Roto-Rooter was $7,250. We decided to get another quote who will be charging $5,200 so about a 2k difference. Mine certainly issue certainly seem to be minor compared to yours however bottom line is it's worthwhile to get other quotes. 

Hello Agents, Builders, Contractors, 

As a Mortgage Loan Officer a lot of our business comes from referrals. As a newer MLO who is building up a center of influence I would like advice on how to approach an individual that I would like to work with. I understand that most agents, builders, and contractors may have many options when it come to lenders and it's important for me to not only gain their business but to provide value. So my question is specifically as a agent, builder, contractor, banker, financial advisor (truly anyone can be a source of referrals) how would you like to be approached? 

What has a MLO done in the past to make you say "I'd like to work with this guy/gal"? 

Do you prefer a phone call, text, email? 

Starbucks card, funny meme w/email, local market updates, I'm open to all ideas and would love to hear how you decide whether or not you'd like to work with someone. 

Thank you! 

Lorenzo 

Hey Earl, 

As most have mentioned already networking events can help tremendously! I also love the Bigger Pockets & On the Market YouTube Channel. I'm a very visual person so sometimes watching a video rather than listening to a podcast helps it stick a little more. Hope that helps! 

Welcome to Bigger Pockets Abdiel! Happy that you found BP, and excited for your journey! 

Hi Philip, 

1. This depends on what your goals are. Best thing to do is consult with a lender and explain what you are trying to accomplish. A good lender should be asking these questions to ensure they are finding the best program to set you up for success. It could be beneficial to shop around to make sure you are getting a  competitive rate and favorable terms.

2. Yes, you can refinance now and look at purchasing later. However, if you are looking to do a cash out refi you will be paying interest on the new loan amount plus cash out immediately. If this is your primary residence you can do a HELOC on the property and have the line of credit ready to go without paying interest on it. It will sit interest free as long as you don't draw from it. This could be an option for you.

3. Unfortunately, I’m not a CPA or tax advisor so I cannot help with this question.

Hope this helps! 

Tyler,

Have you considered a HELOC? A HELOC would allow you to pull equity on your primary without having to refi the full balance of the 1st mortgage into a higher rate. You could then use that money as a down payment on a 2nd home or investment home (typically need 20%). Some lenders will allow you to pull up to 90% LTV on your primary. Another benefit is you typically don't get charged interest on the money until you withdraw so that money could sit interest free until you're ready to use it. I've helped clients in the past use a HELOC to buy a second property.

There are some downsides though. Number one, HELOCS are variable interest rate lines of credit so be sure to talk to the lender about how frequently they can change and what the cap rate is. Secondly, as with any new line of credit this will increase your debt ratios and you will need to be sure that you can still qualify for 2 mortgage loans unless you go with a lender that will take into consideration your potential rental income on your primary.

Hello Brendan,

1. 1. Bigger pockets has a basic mortgage calculator that can be helpful. However, if you're wanting a bit more accuracy a lender is able to do a bit more research to find the taxes, and estimated closing costs. Insurance can be found on the MLS.
2. 2. I’d first start off by understanding what your goals are and make sure they are realistic in your current real estate market. Are you wanting to cash flow, lower house expenses, etc. Once you know your goal you can use the rental property calculator that BP has to evaluate any potential deals.
3. 3. Some sellers are reluctant to accept FHA financing because FHA loans can take longer due to the stricter guidelines. However, it can still be done! The increased rates are putting downward pressure on the market, so I believe sellers are becoming more open to other types of financing since homes are starting to see more days on market and sellers can become more "desperate" to sell.
4. 4. This largely would depend on the requirements of the lender. Some lenders may require X amount of mortgage monthly payments in reserves and others will not need any. Depends on your loan ratios, credit history, ect.

Hey Christian!

Welcome to BP man! By the depth of your question, I can tell you have a great mind set and have put some thought into what you want to get out of RE which is great! My girlfriend and I are in a similar situation. She recently graduated as a RN and has student loans that are on an income-based repayment plan but we are not in a hurry to tackle that debt right now.

Like you we’d rather invest in RE and build up additional income through RE to tackle that debt later down the line. In our case we are doing a house hack. We will be purchasing a single-family home in our local market and living in one or two rooms and renting the other bedrooms. This will lower our living expenses while simultaneously getting all of the other benefits that come with owning RE (tax benefits, debt paydown, and appreciation). We plan to live in the property for one year and purchase another house hack deal the following year until we can generate enough RE income to dabble into other strategies. 

In my opinion I think house hacking is a great place to start out as a new investor. Feel free to reach out with any questions! 

Good morning Julia,

Great question and welcome to BP! Finding good deals have been hard to come by, however, it seems to be getting a little easier with the increased interest rates pushing some buyers out of the market thus giving people who are still in the market less competition. I’ve noticed this in my own local market.

The two primary advantages of buying an existing home would be convenience (move in ready) and cost. Most would automatically assume that it would be cheaper to build however that is not always the case especially in today’s market conditions. With supply chain issues and rising inflation cost of labor and materials are at an all-time high. This is not to say that it’s completely out of the picture though. I’d just ask some questions.

Is there any time sensitivity with getting into a property? If yes, purchasing an existing home might be a better choice for you.

Have you talked with a local builder to get an estimate time of completion as well as costs associated with your desired build? 

Once you’ve asked your self a couple questions and you decide what route you’d like to go there are ton’s of financing options out there for both scenarios. Please fill free to reach out. I’d be happy to help! 

Good afternoon Kevin, 

To better help with this question, it would be good to know what you plan on doing with the cash out. Are you going to be keeping it for emergency funds, home improvements, purchase another property?

Typically, HELOCS are variable interest rate loans however you only pay interest on what you utilize (typically). Considering you if you went up to about 80% loan to value (some lenders can go up to 90% LTV) you would be looking at about a 166k HELOC amount.

Benefit with doing a HELOC is that you would only pay interest on what you utilize so if you are only looking to use the funds for a few home projects and emergency fund it might be a better option as opposed to doing a full refi plus cash out because then you would be paying interest on the full amount of the new loan and not to mention most likely refinancing into a new higher interest rate on your first mortgage.

Hope that helps a little bit. But again, it's important to know what your plan is with the cash out.