All Forum Posts by: Nghi Le

You can put as low as 3% down on a conventional loan, but typically 5% down (or more) is your better bang for the buck. What are you planning to do with the current house? Depending on that answer, your DTI might need to cover the mortgages of both houses. I'd check with your loan officer, or if you don't have one, I can recommend a mortgage broker.

He actually decided to keep the property. 

I've borrowed from both of the lenders you mentioned (and a lot more).  Hard money is very competitive here in WA, which means you have a lot of choices.  If you're shopping around for different hard money options, this video may be helpful in your decision making.  You need to narrow down what's more important to you first because there is no one-size-fits-all lender.

Keep in mind that an investor's experience with a lender pre-COVID can be completely different than now, especially those lenders that stopped lending in April/May and have started coming back.  Just about every lender now has new terms, new underwriting guidelines, and potentially even new (or reduced) staff.

I wouldn't wait two whole years to do the refinance; attempt to do it once your rehab is done and you've forced some appreciation into the property. Unless you're saying it's going to take two years to complete all the rehab?

4.25% seems high overall; did you only put 3.5% down? Rates are pretty low now, and I think they'll remain that way for at least a year. But two years... Not sure about that.

You can go up to 50% DTI. I'm in the middle of a conventional cash-out refi, and my DTI is 49%. If you have less than 10 car payments left, you should be able to exclude that from your DTI. Overall, I'd say get another conventional lender's opinion, or feel free to PM me if you want mine.

Most of my properties are in LLCs with commercial loans. Asset-based rental loans are currently at 6-8% interest, about 1.5% higher than pre-COVID. Portfolio bank loans are below 5%, but much harder to get right now. Most of these lenders have stricter credit, reserves, LTV, and DSCR requirements than before.

You know Loftium laid off 90%+ of their people mid-March, right? That's probably why you haven't heard back from them.

It's actually worse than you think... and I'm surprised that nobody's mentioned this yet.

Seattle passed a winter eviction ban earlier this year (before COVID stopped everything) that prevents evictions annually between December 1 to March 1.  This 6-month eviction moratorium, assuming that the Stay At Home order is lifted by June 4 (seems doubtful), would take us to December... and then the winter eviction ban would take us to March 2021.

But it's not all bad.  Those who are spreading fear about the rent strikes and massive rent delinquencies should stop.  There are plenty of data (both local and national) that says we're not doing too bad, and that May was actually better than April.  We've been talking to local landlords and property managers, and RHAWA (Rental Housing Association of Washington) did a mass survey of small-time landlords; there are promising stats across the board.

Data Source:  https://www.nmhc.org/research-...

For landlords who are in a rough spot, RHAWA also put together a great resource page.  I discovered it when I talked to a landlord last week about how the Housing Connector rental assistance program paid the rent (in full) for his tenant who couldn't make the payment.
https://www.rhawa.org/covid-19

@David Roe Whether you think the virus or pandemic is real... the effects of it certainly are.  We're all living in uncharted territory right now.  You seem fairly confident in your prediction of a quick recovery.  Did you also predict that our country (and the world) would be where it is right now from this virus?  Can you predict how much longer we'll be in it?

The reason why investors and lenders, especially those who've been doing it for decades, are scared of the situation isn't necessarily because of the virus itself, but because of the reaction to it.  They don't want to put their money at risk when they can't predict what people (and the government) are going to do.  They're more concerned with return OF their money than potential return ON their money right now.

If the quarantines and shut-downs had ended last month, I would have felt better about the economy and the housing market.  At this point, I think some things are permanent.  Not everyone will get their old jobs back because a lot of jobs simply won't exist anymore.  Companies/businesses (especially restaurants and startups) are going out of business.  Those that can last until the country opens up again are not going to go on a hiring spree when the pandemic is over because their consumers won't be back to their normal spending habits right away.  Do you think you'll see airplanes filled to capacity anytime soon?  Or packed football games, movie theaters?  Do you think people will go back to work and start spending simply because the President says they can?  Watching other countries that have opened up ahead of us gives an indication of our recovery.

You mentioned that things were so good before this virus came along.  There were a lot of folks saying that we were overdue for a recession (based on historical data of normal markets), and this virus just kick-started it.  Whether you believe that or not... do you disagree that we were much closer to the peak than the bottom?

In my market, we're still seeing insane competition, an average of 4-5 offers within the first week with pre-inspections. One of my investor friends listed a house a couple of weeks ago and had 50 showings and 10 offers, all at or higher than list price. Within 3 days, they got under contract with $110k over asking, all contingencies waived, and non-refundable earnest money. Do I believe that our market will be this good in 3-6 months? Definitely not. Real estate tends to lag the economy by at least 6 months here. So I've stopped buying flips and BRRRRs because I don't know what an ARV looks like in 6 months, and I don't know what the state of lending will look like either. When lending changes, I don't know if I can refinance (my BRRRR), and I don't know how many of my buyers can still get a loan (for my flips).

I think you may be able to find lenders for your deals, but keep in mind that lending on your price point was difficult even before the pandemic.  I recommend looking for lenders local to your properties because they're more familiar and comfortable with those price points.  Lenders have already priced in risk, meaning that you're going to pay more for less (compared to before).

No need to keep having this same discussion.  Here's an older thread on BP that's talked about this:
https://www.biggerpockets.com/forums/86/topics/634947-washington-state-law-rcw-6134-and-preforeclosure-flipping

There are some other ones too, but they basically convey the same information:
https://www.biggerpockets.com/forums/93/topics/157450-rcw-6134-and-similar-acts-in-oregon-nevada-and-california
https://www.biggerpockets.com/forums/773/topics/685978-what-are-some-absolute-donts-in-washington

You can ask the local experienced wholesalers about it.  Most wholesalers tend to market to absentee owners to avoid being in conflict with this.  You might get away with using a list that includes some homeowners in foreclosures (if it's not the majority of the list profile), but there's no guarantee.  Courts tend to side with the homeowner over the investor, especially in our state.  We're all being punished because of something a bad investor did a decade ago.

Before you continue down this route, please research RCW 61.34 in our state.  You may want to re-think targeting homes in foreclosure for your marketing campaign.