All Forum Posts by: Sasha Mohammed

i would argue this is not a one-size-fits all -- i think this is personal preference/ going to differ depending on your long term financial goals and strategy.

Personally, for how much the lump-sum is in cash, vs how much it impacts your monthly payment, i'd rather keep the cash. OR i'd rather put that same cash toward buying down my interest rate instead - THAT would likely have a bigger impact on my monthly payment than paying the up-front MIP in cash.

to each their own on this one, though. someone else would have different reasonings, like attempting to maximize equity, that it would make sense to pay off the up front up front... up front :)

I would recommend commercial brokerage, yes. Any joe blow mortgage broker may have AN option on commercial (anything 5+ units), but they may not have more than one option for lenders to be competitive in rate, and they may have never even closed one before to know the nuances of them. 

Loan Professional knowing how to analyze the deal for viability so you're not wasting time, and experience in that space.... both very important to success in closing. Especially on a purchase. 

Its determined by your VA disability status. Any loan professional should be able to request your Certificate of Eligibility, which will outline what your funding fee will be. I believe you could order it yourself as well through WebLGY if you have access to that?

what is your idea of "decent rates"?

I just priced out a 1 unit inv. prop at 80% LTV on a 12 month bank statement program I'm getting a 30 year fixed at 7.75% with somewhere between 1-3 points. this is with a 5 year PPP and a max 55% DTI. 24 month drops the rate to 7.625% today...

There are options out there, but "decent" is subjective these days :)

first and foremost - thank you for your service! :) 

which type of lender absolutely does matter - as @Zack Karp mentioned - banks and credit unions typically 'overlay' guidelines, which can make it it a bit more of a challenge on qualifying. Their rates also will differ.

Rocket has 2 channels - retail and wholesale. Nothing wrong with Rocket money, but you can access their giant bank accounts for much cheaper by going through a broker instead of calling them directly. you also benefit from the broker's knowledge and experience in the WHOLE loan process, as opposed to retail call centers typically passing you off to a "processor" once they collect your appraisal deposit. 

Another fun fact about VA loans which may be "overlayed" -- technically there is no DTI cap. if you get approved/eligible findings, AND you meet the residual income requirement, you could have an 80% DTI and still purchase with 0% down. banks, credit unions, MANY lenders will still cap DTI. just one example of an overlay as you're shopping :)

The dollar amount of your entitlement ($36k) does not refer to a loan size for you, it determines how much the VA will guarantee to the lender in the event of your default. You're good to go on the 0% down so long as you "qualify" with credit, income, loan limits, etc.

Loan size is another area that is overlayed, so if you're looking to go over the county loan limits in your area, i would confirm the lender can do VA Jumbo, and what their maximum loan size is.

And lastly, if you are not considered disabled by the VA, i would also spend an extra couple of minutes to see what your VA funding fee is going to be. This caps out at 3.3% of your loan, and can be a pretty hefty price to pay for 0% financing in some cases.

Best of luck! 

@Daniel Petta TBH i wasn't hearing anything that would be an issue per say. The loan size is below one lender's $500k minimum, but you being an OOS investor is a non-issue, and being a newer investor also isn't a huge issue. Do you own your primary residence?

There are portfolio lenders out there that could finance this for you from the few "no" reasons you mentioned. To determine for sure, though, we'd have to have more info, like how much you intend to put down (LTV), reserves you are holding, credit score, where the properties are located, etc.

Personally, as a mortgage broker, I'm not really recommending portfolio loans right now, mainly due to rate and costs associated with them. 

IF they cash-flow positive on their own, I also would recommend you split your purchase contract into individual purchases for individual properties and go DSCR financing on each. The only reason i would consider a portfolio/ blanket right now is if they weren't able to stand alone, and they needed each other for your combined numbers to "work"

what i'm understanding is you are wholesaling the property and your buyer backed out, requiring you to fulfill your obligation to purchase? do you intend to move forward with the renovations? or do you simply need something to purchase the property while you await a back-end buyer/ investor?

I would look into a bridge lender ASAP!

broker here, and i too have struggled to find an option for heloc for investment property. its sort of like the unicorn of lending these days! I have lenders that will do HELOANs all day long, and some which will qualify off DSCR as opposed to income/ DTI. @Bianca Rodrigues does the property cash flow positive with long term rents as opposed to airbnb STR income?

HI @Michael Shepherd! Congrats on the new contract/ project! 

It's likely the size of this one is going to be too small for any institutional investor on the acquisition/ rehab, but you'd likely have a ton of luck in the private money space! 

Just to keep the conversation going - do you intend to refinance or sell on completion of renovations? sounds like both are an option, but curious what your preferred investment strategy is.

If refi, you should hit the $75k minimum most lenders are looking for. 

i also was advised to establish a single-member LLC as @Melissa Hartvigsen had mentioned. i, too, am my only employee, and had to establish a salary for myself in order to comply with the rules. You would be paying both employer and employee taxes on the salary you pay yourself, however, by eliminating the self employment tax, it does end up saving quite a bit. plus, the payroll company (i use ADP) automatically pulls both sides and pays the IRS for me as my paychecks go out, so there is a chunk paid to IRS before its time to do taxes -- when its tax season, a chunk of my amount due has already been paid, which FEELS like a blessing. Definitely consult with a CPA/ tax advisor or financial planner to see if this might be a viable solution for you as well.