All Forum Posts by: Mike Burkett

@Jeanette Yan  Welcome and congratulations.  I'd be happy to help in any way I can.  Please don't hesitate to contact me.

I'm told by prognosticators to expect a correction/downturn/recession/crash sometime in the next 12-18 months. I've been told this for the last 4 years. Yesterday, an investor with vast confidence told me to expect the sky to fall in November if the White House changes hands.  I haven't heard anyone get it right in the past 4 years.  Care to try your luck?  What do you think is going to happen?  What is the one main reason you believe that?

@Josh Tonnesen  Josh, is that a real estate broker fee or a mortgage broker fee?  I don't know how big the transaction was, but if a mortgage broker was involved in the transaction, 1%-2% fee is not atypical.  I've heard of them as high as 5% for unscrupulous brokers.  Mortgage broker licence -- If you are financing your own properties, you can go directly to many lenders and avoid a broker altogether.  Personally, if you are not in the mortgage business, it is a pain in the *** to mess with a license when there are ways to avoid broker fees.  

@Marco Morkous POF and financing are not the same. You need to get pre-qualified. Tell a lender your background, your experience, your credit, and your funds available. Based on that, they will have an idea of a maximum amount they would lend you. They can issue a POF based on that information. Once you identify a property (under contract or not), the lender will then evalate the specific property to determine the amount they will lend on the property. That is the point they tell you whether they will finance the property or not.

@Matt Rozzell  Personally, I'm a little biased, but if there are any questions I can answer for you or help in any way, please let me know.  Thanks. 

@DeMario Drummond If you don't have cash, you can't buy at auction. If you dont' have cash to buy non auction property, you need a loan. HML won't let you live in the home. You will have to finish construction then refinance into conventional loan. If you can qualify for a conventional loan at purchase and you have the time, get the conventional loan and move into the house and fix it up. This way you don't need to refinance (saves money). If you don't want a 15/30 year mortgage because you don't want to make payments for 15/30 years, just pay additional principle every month until the loan is paid off.

@John Hamilton  If you are using conventional financing you can refinance the $50k purchase within 6 months with same terms as if you were purchacing it.  ie 80% of the purchase price.  Fannie won't allow cash out until 6 months.  Non conventional may allow you cash out after 90 days but rates will be higher.

I do not understand the "billing for construction costs"  What do you mean?
Has anyone done this kind of loan AFTER the fact? I am currently doing the DF option on a SFH I close on next week, but we are billing the closing statement for construction costs. Which falls in line with the PP eligibility.


  

@Douglas D Rogers You can finance properties you hold with either conventional (Fannie Mae) loans or non conventional loans. Fannie Mae requires the property to held individually, not in an LLC. Fannie's interest is lower than non conventional because the federal government guarantees those loans (it's an implied guarantee), not because your LLC has less credit. Qualifying for a Fannie investment loan is very similar to qualifying to buy the house you live in. If you can qualify for a home loan, you may be able to qualify for a Fannie investment loan.

@Douglas D Rogers  I would need more specific information to answer your question.  Are these investment properties or are you going to live there?  Are you flipping these houses or holding as rentals?  How are you financing them?  With conventional loans or commercial loans?  

@Marco Morkous  @Andy Webb Our HML loans to investors are for short term fix and flip investments and we do require the property to be titled in an LLC or other entity. (Has to do with home mortgage laws and the ability to homestead a property). If an investor is buying or refinancing into a rental property, we don't necessarily need the property to be in an LLC. It can be either. We prefer an LLC. If an investor buys a property in an LLC as a rehab and turns it into a rental he can refinance into a 30 year loan. Fannie Mae will allow you to deed that property in your personal name prior to closing. (If the LLC ownership is the same as the individual(s), there is no "seasoning" penalty. If you want to leave the property in an LLC, we can also 30 year mortgages outside of Fannie/Freddie. Those rates are a little higher than Fannie/Freddie.