All Forum Posts by: Sasha Mohammed

i highly recommend you have your contractor walk the property and give you bids as opposed to trying to estimate on your own. i see newer flippers get into hot water ALL THE TIME because they simply don't know what they don't know (and obviously can't see behind walls). 

As for finance costs, talk to your trusted mortgage professional. Some lenders will let you do as little as 10% down on flips, PLUS finance up to 100% of the reno budget. But there are points and fees you'll have to pay at closing, and most lenders will want to see you have some post-closing liquidity as the rehab portion of the loan is funded in draws (you pay your contractor first, then the lender reimburses you for that line item). 

The only way to know is to run the basics of the specific deal by your mortgage person. and as you get more of these under your belt, you'll be able to start ballparking better. 

Hey Fitz! Welcome to BP (and real estate :))

Rocket is a reputable lender, but you will 100% get better rates/ terms going through a broker who is signed up with Rocket than going through Rocket directly. 

The thing about consumer loans - soooo many factors will dictate your loan rate/ terms. a few examples (you can skip if you'd like): what zip code you're in and your loan size (conforming vs high balance vs jumbo), LTV/ Down payment, credit score... pretty soon if your DTI goes above 40% it will carry a higher rate. Type of property (SFR vs condo vs multi-fam...) is another one.

TLDR: There's simply is no one size fits all with mortgage, and you'll drive yourself crazy trying to compare terms lender by lender on your own.  

PLUS, those consumer loans ("i want to buy a house to live in") will fluctuate with the market daily, and sometimes will reprice mid-day as well.

My best suggestion (yes, i'm bias) - do your vetting on the broker themselves. do they sound like they know what they're doing? do they sound knowledgeable on guidelines? are they able to ask questions to get to the bottom of your goals, and are they able to offer up solutions to help you meet your goals?

If you're happy with the broker, let them determine the best lender for your scenario. If you're not confident in the broker/ loan officer you're working with, THATS where i would recommend you shop around. 

Hope this was helpful (and not too lengthy)

HI Mauricio,

I would suggest reaching out to an experienced investor-friendly mortgage brokerage. There are a ton of lenders out there that specialize in loans for flippers like yourself. Acquisition money, flip money, all based off the numbers (and not your personal income). Hard money is not a bad option, but tends to be much more expensive and often requires larger down payments than the lenders we utilize for our clients and their flips. TLDR: There are better lenders suited for your needs than hard money. 

hope this was helpful

Yes, Ive been working with (and referring) David Salvin Esq. for years. He's been very reasonable on cost for my clients, and his wife is now a good friend of mine :) They are a family-run business. He does all types of estate planning and they are local, in OC. 

Mods please delete if not allowed - 

David Salvin @ (949)305-6400

Wife's name is Jaye in case a woman answers the phone. 

GL!

no, this is not correct. you'll have to order a new certificate of eligibility to see how much entitlement you have left. from there, you should be able to determine how much loan size you can max-out on the new loan. 

there are very specific guidelines on having multiple VA loans as well. the VA will let you, so long as you still have entitlement available, but many (or i would argue even MOST) lenders will not let you take out a 2nd VA loan.

If you have your COE, I would reach out to a local brokerage (who has access to multiple lenders) so they can start working on finding out which lenders will allow you a 2nd VA loan, and then calculating out the remaining eligibility amounts. DD214 should allow the broker to pull a fresh COE from webLGY for you as well.

GL!

you have a couple of options - there are lenders which will NOT look at DSCR at all, and simply refinance your loan into a new loan, say 30 year fixed (if the property is a 1-4 unit). these lenders are more driven by the location of the property, and it will have to be in (or very close to) a major metropolitan area

Assuming market rents for long term rentals aren't enough to DSCR, you could try a lender that will review short term rental income for the purposes of DSCR qualification

Last option, you could continue to do private money, or hard money if you have the equity, but those will likely not be long term financing options. 

as others have mentioned, yes, you need a lease. HOWEVER, unless the lender you're working with has an "overlay" prohibiting it -- leasing to a family member is A-ok. Maybe see if you have a family member that would agree to move in to your departing residence and sign a lease for you. 

First question - are you planning to live in it? or not?

this will determine if you need a consumer loan (living in one unit) or can branch out to other options such as business purpose lending, commercial lending, etc. 

If a consumer loan, you need to qualify with your Ability to Repay. This would likely be loan types such as: fannie/ freddie, FHA, VA (if you're a vet), banking institutions/ credit unions... these will give you the best rates and terms. but you'll likely need to qualify with personal income one way or another.

if not a consumer loan, it opens up another world... but then you CANNOT live in it (usually a hard line in the sand). These loan types skirt around consumer protection laws, giving you alternative "qualifying" methods, such as DSCR, Bank statement loans, P&L programs, asset depletion.... even hard money or private money which are typically more equity driven.

where do you find the right fit? call a broker :) its our job to find you the right fit for your goals.

I suggest you reach out to a Broker for these loan types. Rehab deals/ ground-up construction deals can be finicky with many moving parts. A Broker is better suited to be able to identify the specific needs of the project, potential hurdles, and your goals... and then match you with the RIGHT lender for your specific needs. there is no one size fits all. 

WE (as loan professionals) also run into these same hurdles your'e talking about (evolving market/ terms, lowball values, etc) but we're better suited to work through them with MANY deals under our belt for experience. We also insulate you from that headache... that's what you pay us for. 

I had a deal i ran through Kiavi recently, and of course they chopped our value. It took me 3 weeks to get them to justify the value we expected, and eventually they came around. My client had no idea there was ever an issue, so he had a good experience working with us and we closed on time with "no headache" as far as he was concerned. 

Point is, the gray area that is hard money or private money lending can leave a lot to be desired. I also get frustrated, but it is part of the process. if it were easy, everyone would be doing it. 

Do yourself a favor and reach out to a mortgage broker. 

I vote lock. this market is just so volatile, and personally I don't like to gamble with my client's success. 

It's true none of us have a crystal ball, but we do all have opinions on what we think the market will do, and the consensus (still an opinion) is that we will see lower rates down the road. whether that will come later this year, early next year, or not for another 2-3 years is still up in the air. 

Point is, "if you like it, lock it" and you can explore refinance opportunities once they arrive. 

Just my two cents. Take it with a grain of salt.