All Forum Posts by: Seth Wilcock

Hi @Ryan Thomas - it's mainly because my current primary dwelling is through Auto Owners, which is also who the umbrella policy is through. I've heard that when I have an LLC on rental properties that I would like to have covered under the umbrella policy, the rental properties have to be through the same carrier. Essentially, I wouldn't be able to add the rental properties under the umbrella insurance, unless I either disolve the LLC's or switch carriers for all of my policies.

Hello,

My insurance broker in Indiana is no longer able to write policies through Auto Owners homeowners insurance. I have two properties in Indiana that are currently covered under Auto Owners. I would like to stay with this carrier as I have an umbrella policy set up, and my properties are in LLC's. It would add complexity to switch carriers at this point. If you're a broker and you can issue an Auto Owners policy, hit me up as I would like to move a couple polices over to you.

@Clayton Hepler,

Great question.  Yes, you would be welcome to move into a vacation home anytime you please.  A 2nd/vacation home is there for your personal use and enjoyment in nature.  If it ends up becoming a permanent residence later, that's fine.

@kade Matthew's - with the properties I'm looking at, it may only be about $200K-$300K. Some of these require a rehab (which I would come out of pocket for), I just don't have enough funds to buy and rehab. I already have a contractor and realtor team out there. 

@matthew crivelli - thank you for this! That's helpful and good to know. I knew there had to be something, but wasn't aware of the stabilization. 

I'm a residential mortgage lender in Englewood, CO and I do some out of state real estate investing. 

I'm interested in pursuing some commercial property in Indiana for my investment portfolio (5-10 unit apartment buildings), and I don't know much about the commercial lending space. Is there opportunity for DSCR in the commercial space? What kind of down payment is needed for commercial?

Looking to network with some commercial lenders in Indiana. 

@Joshua Buchanan - First and foremost, thank you for your service!  

The VA home loan is designed to be a primary residence mortgage. As long as you are living in one of the units, you can rent out the other 3. I just did a quad for a veteran not too long ago so I'm aware of the ins and outs. The definition of a primary residence, as specified on bullet point 6 of the Colorado standard deed of trust, states that you have the intent to occupy the home within 60 days of closing, and for at least 12 months past the date of occupancy.  See the excerpt below from the Colorado standard deed of trust.

With your close date most likely being about 30 days from the date you're under contract, you would need to occupy the home within 60 days after closing.  This would give you a 90 day timeline between finding a home to actually living in one of the units.

I agree with @David Pere. There is no better loan VA. Get yourself a team that knows the product and not scared to write a VA offer. Thank you for your service @James Jones.

Hi @James Jones - this is a great question. Sometimes, sellers can shy away from government financing like FHA, VA, or USDA since there are slightly stricter guidelines and requirements on the appraisal component. That being said, I have several clients under contract with VA financing right now. It just depends on the property and what the seller would be willing to accept. In fact, I just had a client close on a Quad with VA financing this past summer.

Also, I don't know of any other loan program that will allow you to purchase a multi-family home with 0% down and no mortgage insurance.  

Lastly, when you're looking at a quad, chances are you'll be looking at a different type of buyer pool from a competition perspective. The blanket statement that sellers don't want to entertain a VA offer will likely be more applicable to single family homes, condos, and townhomes, not multi-family. There is still fierce competition in the multi-family segment, but I would argue that it is not as competitive as 1 unit homes since there are more first time home buyers and folks looking to start a family in the 1-unit home sector. The only competition you'll likely find in multi-family will be other real estate investors and house-hackers, which would be a smaller audience.

Don't get discouraged and don't let a broker tell you that. You can still get a VA offer accepted in this market. Get a firm pre-approval letter from a quality lender with a good reputation in the community and an agent that knows how to write competitive offers and you'll be fine.

Hi @Richard Ramirez - Some excellent questions indeed!  There is a lot to unpack here, so I'll work on addressing topics one by one.

Newbury home - you just refinanced this home 2 months ago, and I'm guessing you probably did this as a primary residence to get the best interest rate.  Correct?  I encourage you to read through your deed of trust, particularly the section about "occupancy" to ensure you are not violating the terms of your deed of trust.  New loan = new deed of trust = new occupancy rules and 12 month waiting requirement (if you refi'd as a primary).  I've included an excerpt below from my deed of trust as reference. 

If you closed the refinance as a primary residence and your current lender discovers that you are not occupying the home as a primary residence when you said you would occupy for 12 months, this is considered mortgage fraud, and the bank can accelerate your loan, issue fines & penalties, and/or throw you in prison.  You would need to refinance the home again as an investment property if you have no intention of living there for 12 more months.

Using a conventional refinance to restore your VA entitlement is allowed one time. You'll need to submit form 26-1880 to the department of VA to ensure your entitlement is restored to full entitlement. Your mortgage lender can help you with this, and will likely ask for a copy of the settlement statement from the refi you just did to submit with form 26-1880 request for one-time restoration of entitlement.

The max cash-out allowed under Fannie/Freddie is restricted to 75% loan to value on a 1-unit investment property. 2-4 unit homes have a max 70% LTV under Fannie/Freddie for investment cash-out refi's. Depending on how much cash you want to pull out for your next refi will tell you what your home would need to be worth at that time (the home will be an investment property if you're not going to live there). $333k value x 75% = $249,750 max loan amount today. $400K value x 75% = $300K new loan.

You can actually buy an investment property with as little as 15% down. Your rate will suck and you'll be paying PMI, but from a down payment perspective, you only need 15% down to buy a single-unit investment property with conventional financing under Fannie/Freddie guidelines. If the property is a 2-4 unit investment purchase, you'll need a minimum 25% down under Fannie/Freddie.

Lastly, we should discuss your VA entitlement a little bit, and VA's guidance with the one-time restoration rules. The Newbury home was originally obtained with your VA entitlement, and you refinanced this home with a conventional loan to restore your entitlement back to 100%. You are going to be using your VA entitlement to buy a new construction home (we'll call it "Property B") in April. Assuming you eventually refinance Property B with a conventional loan, you won't be able to restore your VA entitlement since this is allowed one time, and you would have done this on the Newbury home. If you want to restore your VA entitlement again to be used on a subsequent VA home purchase after Property B, you would need to sell Property B AND the Newbury home to restore your entitlement back to 100%.  This is a weird little rule that VA has, and not many people know about it.  Excerpt from VA Pamphlet 26-7 (Revised) Chapter 2: Veteran’s Eligibility and Entitlement, article 6 listed below for you reference: