All Forum Posts by: Michael Glist

I think that they (and possibly you) are thinking about the cost of the money in the wrong way. If the lenders you have found that ARE willing to lend to them have a higher rate, yes that sucks but, without it how much are they losing out on. If their goal is to but another primary residence as well as a few rentals then they money will not only allow them to do that but will also provide them with additional income (via rental income). I think checking with a few local banks, credit unions as well as mortgage brokers would be beneficial to see if there is a better deal out there but I think that not doing it over a rate that is 1% higher than the normal rate would be them losing out on a lot of opportunity. If you can find the better deal definitely do it as the last thing you need to do is pay more for a service you could have gotten for less but if you are going to pass up on the opportunity altogether due to the rate I think that is a bad idea. 

So I would say if you are looking at off market deals and are going direct to the seller (not a wholesaler) to make sure that if you end up representing yourself during said transaction that you disclose to them all of their options. The last thing you want is an issue with the city, county and/or state because you didn't tell them that if they list with you instead of selling directly to you that they could potentially get a better deal. 

Besides that I think that depending on how long you have been in the business and how many deals you have done your best start could be to reach out to your past clients. One of my first deals was a past client that fell on hard times and was moving out of state and just wanted to get things over with as fast as possible so they could move on and start fresh. 

As mentioned some places do require it and some do not. Best bet would be to contact BOTH the city and county and ask them if there is a requirement for a license. This would be your best source to gather that information based on the properties location. You may also want to email them to ensure that you have the paper trail just incase.

So if this is for a primary residence then you could use seller financing, rent to own, or look into NON-QM lenders and see if they have any options for you in regards to moving from W2 to 1099 which depending on if you are in the same line of work or not may or may not work. 

If this is for an investment property than you can look into getting a DSCR loan. These loans are based on the property and it's ability to generate enough rental income to cover the mortgage, taxes, insurance, HOA, etc.

So it may or may not work but you can try to input your original purchase price and rate ( or most recent refinance numbers) to ensure that it is calculating your mortgage based on what you own and your current mortgage. If that does not work feel free to message me as I have a calculator that I can run the figures through and send you the report. 

So if you are looking to purchase a property strictly as an investment property as opposed to live in and eventually house hack or a 2-4 unit and rent out the additional units then you will likely need 20-25% down. You can always check with local banks and credit unions to see if they have any programs that will allow you to purchase with less down which may work since they are local and typically like to invest locally.

You also need to take into consideration that since you are a new investor that banks will make sure that you qualify for not only the new mortgage and expenses but your personal expenses as well which as a first time investor can be more difficult. 

If you are looking to get into a property with less cash into the deal I would say you may want to look into the BRRRR method. This will allow you more opportunity to end up with no cash in the deal and scale a bit faster.

Is there a particular reason you are not wanting to go with private money?

So I think the better thing to do would be to partner up with a private lender to help you with the capital you need to acquire the properties and then rehab them. Then just flip them. I know you are wanting to build a portfolio but I think that it would be better to do a few flips and then you will have your own capital that you can now invest with and start building your portfolio. This would likely take less time than trying to save up cash from cash flow while trying to pay your private investor off. 

That makes sense. I would say that you will also want to talk to your lender that will be handling the VA refinance and see if there will be any issues with title. Since most hard money lenders only lend to entities you will want to see if refinancing out of it into your personal name will cause any issues. You will also want to make sure to let your HML know about this since they may have an issue with you transferring the title out of the business name into your personal name.

Feel free to message me if you have any additional questions as I am always happy to assist someone who served this country.

So if your end goal is to refinance into a VA loan and live there I would suggest looking into a VA renovation loan.

You should be able to talk to your HML and get an extension. There may be a cost to do this but the cost of an extension is likely going to be a lot cheaper than refinancing your existing loan.

Also if your initial thoughts are that you may run into horrible contractors I would suggest talking to other local investors and seeing who they recommend to use and who to stay away from. This can help with some eliminate or at least reduce your risk of getting a horrible contractor this causing delays.