All Forum Posts by: Seth Wilcock

Welcome to BP Trent! When comparing the cash out refi to a HELOC, it's best to have quotes on both loan options so you can run a comparison of the loan terms, interest rates, closing costs, amortizing, etc. Also, you need to assess your habits and relationship with revolving types of debt. Are you the kind of person to pay minimums on revolving debts, or do you make larger payments to payoff the loan quickly?

If you are the responsible type, cash flow positive, accountable to yourself, know how to handle finances, and you don't need the security of a fixed monthly payment, the HELOC could make more sense. Especially if you plan to rinse and repeat. If you don't intend on making payments faster than the minimum payments on the HELOC, and you're the kind of person that needs an accountability partner, the fixed mortgage will probably make more sense.

Hi Tina - Do you have a note or any signed agreement in place with the current owners for the loan? Anything that references an interest rate, term, monthly payment, etc. or is this a handshake agreement? 

Hi Matt - this is a great question, although somewhat difficult to answer without having all the details. If you're a commission-based employee now and you're moving to a new commission based job in the same line of work, you'd likely be fine since you have the 2 year history of receiving commission income in your field. If you don't have a history of receiving commission pay in your current job and are moving to a commission role, then you'll likely need to establish the two year history. 

The other options (as you eluded to already), are to add a co-signer, co-borrower, or document other sources of income to help you qualify. 

Will the new job be 100%commission or will there be a base salary? Any kind of guaranteed commission (E.g. you won't make less than "x,xxx")? 

Hi Nicole! Welcome to BP! I'm in Centennial and would love to meet up some time to talk real estate investing. I'll message you. 

Matt - I think the metroDPA loan would make more sense for the acquisition since it would reduce your initial out of pocket expense and keep more money in the bank.  Yes, it comes with a higher interest rate and payment, but keep in mind that you don't need to keep that interest rate forever.  There may be an opportunity to refinance later on down the road to get your interest rate and payment down, especially if rates stay level or improve.  The metroDPA loan program does have that silent 2nd that forgives at 1/36th each month (completely forgiven after 3 years), so you would need to keep this in mind when it comes time to refinance later on down the road.  If your mortgage is covered by renters for the initial acquisition, then I don't think you should worry too much about the rate and payment, at least not yet, since you're getting started and taking action.  Passive equity gains/income or a reduced housing expense is still a win in my book.  If you delay your home purchase another year or two to build up additional cash savings for the down payment, your increased down payment could easily be offset by an increase in home prices a year or two later, which would be exaggerated even more if rates also increase in conjunction with home prices.  The opportunity cost of waiting to buy can be very expensive.

This is a beginner/intro class to purchasing residential real estate, specifically in the Denver-Metro area.  We will overview the timeline between getting pre-approved all the way to closing, negotiation strategies, financing, and much more. 

We will be available after hours to discuss questions including house hacking, BRRRR method, and more. This class is free to attend, and space is limited.

Please RSVP at http://bit.ly/2vca2nO

This is a beginner/intro class to purchasing residential real estate, specifically in the Denver-Metro area.  We will overview the timeline between getting pre-approved all the way to closing, negotiation strategies, financing, and much more. 

We will be available after hours to discuss questions including house hacking, BRRRR method, and more. This is class is free to attend, and space is limited.

Please RSVP at http://bit.ly/2vca2nO

This is a beginner/intro class to purchasing residential real estate, specifically in the Denver-Metro area.  We will overview the timeline between getting pre-approved all the way to closing, negotiation strategies, financing, and much more. 

We will be available after hours to discuss questions including house hacking, BRRRR method, and more. This is class is free to attend, and space is limited.

Please RSVP at http://bit.ly/2vca2nO

Hi Zach,

I've done two house hacks in Colorado. A condo in Arvada, and a single family home in Northglenn. I agree with Chris that a 5% down conventional will look more appealing than a 3.5% down FHA from an offer standpoint. I take it you're considering multi-family and not single family? Hence the inquiry about FHA financing? I wouldn't say that FHA has more hoops to jump through than conventional from a financing perspective, but FHA may have some additional requirements for appraisal sake.  FHA financing will likely be a more expensive loan when you take the mortgage insurance into account.

Closing costs depend on the interest rate you select.  Higher interest rate =  lower closing costs.  Lower interest rate = higher closing costs.  If you're not getting at least four different interest rate and fee structures from your lender, then ask for more options or find another lender.  It's possible to purchase a home without any closing costs and no seller concession, but you would have a higher interest rate & payment, which eats into your return.