All Forum Posts by: Rafael Floresta

HELOC is interest only, so it will reduce our DTI by a lot. You need to calculate the LTV with the HELOC, if you go over, you wont be able to refinance, because of the position of the liens. By doing a heloc, it will help improve your credit right away because you will get out of credit card debt. The heloc can go upt to 90% LTV (usbank), but the better rates are for up to 80% LTV (td bank has good rates).

As for PMI, it is not for the life of the loan. That is incorrect. It is only until your loan hits 8% LTV, or 60 months which ever takes the longest.

I use Elend for conventional mortgages, they have very low closing costs, and good rates. I often wonder where those guys make money. My broker name is Nimro, his phone is 973-585-5923. Tell him I sent you.

Hey Rachel! Good job on starting with a duplex. It can be a good strategy, but it depends on how much time and money you have in your hands. Also, it depends of how fast you want to grow your real estate portfolio.

If you are in it for the get rich slow but surely, buying, renting and rehabbing is a great strategy. You will be able to pay capital gains instead of regular income tax, and will also be able to have some cashflow for that time. 

I personally prefer to rehab my properties before I rent, that way I collect more rent and I am able to refinance for more. I usually buy with cash or some form of loan that has low origination cost (heloc, friends cash, etc), and then refinance in for 30y. 

That way I can keep acquiring properties as long as I can find deals. 

3.75 is not that good of a rate today for a 5/1. Owner occupied with 20% down today, for a 30y mortgage you can get that rate probably. I am refinancing with a 15y, and got 2.75. The 5/1 ARM was not too far from that. But every situation is different.

http://www.mortgagenewsdaily.com/mortgage_rates/

PMI did get reduced, but I dont think it is retroactive. But paying no PMI is better than any PMI. =) I dont pay PMI so I dont know the rules for it.

On the escrow, you will get your money back, but you wont be able to use it to fund your new escrow account when refinancing. It is annoying (I am refinancing now, and my closing costs were really high because of that). You might be able to roll it into your new mortgage, but I chose not to.

On to canceling your PMI, for 15 year mortgages you don't have to wait 60 months to cancel your PMI. I am unclear on the 5/1. For 30 years is 60 months (5 years). I would look if you can get rid of your PMI just by appraising your property to prove you are at 78% LTV.

I tried to find more info, but I couldnt.

If you have equity you can always roll the refi costs into the mortgage. The sucky part that is that you will need always some money to fund the escrow account, and NJ property tax being so high, it can be a good chunck of money.

How good is your rate? Why dont you get a heloc and pay off your other outstanding debt? That way, when you refi, you can also refi the heloc into the mortgage. And it will reduce your debt to income ratio.

I am thinking that a 5/1 must hae a great rate, I would try to milk that first 5 years as much as possible. 

But if you intend to move, I would plan on refinance with a long term mortgage with homeowner prices.

Best of luck.

Put some more info! Values, outstanding amount, how many months left, interest rate, PMI...

What do you mean by large condos? Like 2000+ sq feet condos? 

You can perform a title search on any house, and no one will ever be disturbed by it. You can pay a title company 250 for a full report or you can drive down to the court recording office and pay them directly to search. 

Here it is how much it cost: http://www.phila.gov/Records/pdfs/FeesJan202014.pd...

I've never been there, I just do the title search through my title company. I'd love to hear how it really is.

Rentometer can be off. Specially when dealing with historic rent rates. 

@Cherilyn Morgan, welcome!

I live nearby you, and I am also a real estate agent. I don't work with a lot of clients, since I have a full time job and invest heavily in rentals. I got the license because I couldn't find a good realtor to work with.

Agents don't like to work with investors because it is a lot of work for the cash they get. Investors push for lower prices/lower commissions and write a lot of offers. 

But a agent with the right system, and can develop a very profitable relationship with a real estate investor. 

There are some really good tips on this Ultimate guide:

http://www.biggerpockets.com/renewsblog/2013/08/24/real-estate-agents-working-with-investors/

By law you will need an escrow account in your name and on the tenants name. And managing the (tiny) interest it is a huge pain in the ***. Their lease is valid and you inherited it. There is no lease transfer per say. It is just the lease. I would go knock on their door/call them and give them the new contact info. I would also document the current state/shape of the interior when you are there, since most of the time the prior state of the house is hard to prove when there is a change in ownership. 

Also be aware that in NJ there are strict rules on renew of leases, and it gives the tenants a lot of power when they want to stay and you want them to move. 

I dont invest there, but I would call a insurance company before buying anything there. If a house is now on the 100 year flood map, their mortgage company will require flood insurance which can cost big money. That will for sure make it hard to move the house after the rehab.