All Forum Posts by: Minh Duong

@Anupam Banerji I'm a broker, and I do have a few lenders across the states that do equity share depending on the deals. It's deal by deal basis, but they're willing to get about 25% to 50% equity with up to 90% LTV in funding.

Hey, great question. You can absolutely use FHA or conventional loans to buy a 2–4 unit property in PA as a primary.

FHA only requires 3.5% down and allows rental income from the other units to help you qualify, but you must live there at least 12 months, and only 1 FHA loan can be used within 100 miles distance.

Conventional loans can work too—5% down for 2–4 units—and you can use rental income with the right documentation. To buy multiple homes legally over time, the key is moving into each new property and living there at least a year. After that, you can convert it to a rental and use conventional loans for the next one. 

You can do this every year if you qualify. Just be honest about occupancy since you’re signing documents stating you’ll live in the home. If you’re curious about today’s rates or want to talk strategy for your next steps, feel free to reach out. I’ve helped a lot of clients build long-term portfolios this way nationwide. 

@Andrew Nesbitt Typically you will need to have 20-25% Down if it's a 2nd home non-owner occupied property. Now, you do have 3 options: 

1. If you have a primary residence, you can potentially make that into a rental and buy this property as a primary with only 5% down. The interest will still be relatively the same as conventional loans and a lot better than investment loans.

2. You can partner up with other people who have the capital and are willing to invest with you. You can either offer a fixed return on their money (if the cash flow is really good), or you can offer an equity split on the property. 

3. If you have primary or other properties with a decent amount of equity, you can do HELOC (I know some HELOC lenders that do HELOC on investments) or Cash-out Refi to pull out capital for this purchase.

@Phillip Rosin With the information you provided above, the condition will most likely not going to qualify for a DSCR loan with the appraised value at 425k. I think the best approach would be going in with a Hard Money loan. The ARV is good enough for a 90% LTV with 100% Rehab Financed.

Afterward, if the ARV is 425K, and the rehab budget is not too intensive, you should be able to refinance it with a DSCR loan and get the majority of your money back. The DSCR loan should have a monthly payment of somewhere around $2,500 a month. So that means the rental income should be enough to cover the mortgage payment

When people shop for lenders, they always ask for a loan estimate. This document summarizes the whole entire loan and makes it very easy for the borrower to compare different lenders. 

You can check out this link for a better understanding of how to read a loan estimate https://www.consumerfinance.go...

The best practice is to always shop with different lenders first by comparing the loan estimates before entering escrow. This way, the escrow process is smooth, and there is no delay in closing. Plus, you also know what you're getting yourself into with the financing. 

In terms of hard credit pulls, you can have it pulled several times by different lenders, and it still counts as one inquiry. You just have to make sure to call your credit bureaus and explain to them that you're shopping for mortgages. 

While in escrow, you can still call for different brokers and/or direct lenders, and you can reach out to as many as you want. The problem with this is if you switch to different brokers/lenders during escrow, you will have to resubmit the whole entire loan again and restart the loan process. This will delay escrow and closing. You can still switch lenders during escrow, but make sure you keep in mind that there will be delays. 

I do have a few HELOC options, as well as some HELOAN (Home Equity Loan). My rate and fee is competitive compared to any other lenders.

Now a lot of people don't know this, but HELOCs actually have an adjustable interest rate. If you want a fix interest rate, HELOAN is an option to go with, and the interest rate might be a little bit higher. 

Hey Steve, I'm glad to hear that you're taking a big 1st step to your STR investment journey!

Regarding your question about taking a cashout refi for your STR property.

1. Interest did increase a little bit since January. The current interest rate is at a 7% average nationwide. 

2. Most conventional and investment loans let you do 80% LTV refinance. And unfortunately, the refinanced loan cannot be a second home loan as most lenders consider that second lien position to be very risky to them.

3. When you do a cashout refi, the lender will always look at the newly "appraised" value/price to determine the equity inside the house. You mentioned that you could easily sell for $90k - $110k higher than what you purchased for. That's what your equity is going to look like.