All Forum Posts by: Patsy Waldron

Fannie Mae has an investor-friendly loan called HomeStyle that funds purchase and rehab. 

As has been said many times on the forum, most Midwestern cities will enable you to buy and hold or flip very profitably if you have $40K. I invest in the Cleveland suburbs and in Columbus, OH. Both cities have properties with low entry points in decent areas with good quality tenants- i.e. not war zones, but B-/C areas. You do need to know your neighborhoods though, as that's what determines everything from purchase price to quality of tenants to returns.

Go to other banks. The person at your credit union who said that was incorrect, and you want to work with someone who knows their stuff.

Niiiiice! It always amazes me what a few upgrades can mean for what a room looks like! I love the vessel sink and faucet. Looks so modern and takes less counter space than a traditional sink! I also love your mirror- need to find something similar for a bathroom I am remodeling that has an old medicine cabinet.... What kind of lighting do you have in the bathroom? I don't see anything in the vanity area.

Painesville is a nice area. Very cute town, only 20-25 minutes and a straight shot to downtown Cleveland. More affordable than Mentor, but close to its amenities. I was very interested in a couple of properties there- I think there is a lot of potential in Painesville. 

@Account Closed can tell you more, he is based in that area.

Wow, only $100 more for quartz vs. non-hard surface?!? I need to check out your supplier! I went to a countertop store last week and the difference in cost was significant. $15 sq.ft installed for laminate vs. $45 and up for granite and $75 and up for quartz. I guess for a small surface area the difference may not be that large, but for a kitchen... I am using tile in the entryway, kitchen and bathroom. Got a great deal from Home Depot over Thanksgiving weekend (worked out to be a LOT cheaper than LVT), so I am ecstatic!

Wow! Beautiful makeover! Is that vinyl tile in the kitchen and bathroom? And what did you use for the countertop in the bathroom? It looks like a hard stone. I am renovating a house right now and trying to decide what to use for the kitchen. 

@Ryan Hilbun

I have only done loans so far. I like it better because I don't need to consult anyone before making decisions, and once I pay them back we are done (or they can choose to re-invest). Either way there's a predetermined way out and period of partnership that's appealing.

Yes, I think all of them allow refis. Their max LTV varies.... Anything from 60-75% I believe.

You don't mention if you have any money saved up for a down payment. This will dictate how the rest of the conversation about financing goes.

For an investment property, a bank will want to see 20-25% down payment and possibly/probably 6 months or 1 year of cash reserves that cover the mortgage payments. Since you are new and an unknown quantity, they will want to err on the side of caution. Develop good relationships with bankers so they know they can trust you (the bank where you keep your business account is a great starting point, since they know you). Discuss your goals with a loan officer you feel comfortable with. They will give you advice on dos and don'ts and will (should) be your advocate when you apply for loans.

Since you have filed your taxes showing self-employment income for the last 2 years, you are good on that front. The bank will average your income from those 2 years to calculate your income and base the loan amount for which you are approved in that amount.

Having no personal credit is a big problem. No bank will want to lend to you if you don't have a credit history... So it may be wise to build up your credit over the next several months.

Back to the down payment issue- if you don't have enough saved up, you can either wait until you have saved up some more, or go the creative financing route, where you negotiate with sellers directly for seller financing, or a master lease, or something along those lines.

Banks don't like to lend on TOO run-down properties. They usually require the properties to be at least habitable... That said, you can get rehab loans to bring the property up to snuff (some are even available for investors). 

You may run into trouble finding financing for the cheapest properties. Some banks have minimum loan amounts that may be higher than what yours would be after factoring in down payment. I have never tried to buy a condo, but read regularly about people running into trouble financing condos that are "non-warrantable." Look into that carefully.