All Forum Posts by: Sasha Mohammed

@Lance Foster take what your LO friends say with a grain of salt. you're going to get different opinions from everyone; opinions are like armpits, remember? At the end of the day, run the numbers. When you're talking money, math is math. The difficult part of this is guessing where rates will be down the road, and what your adjustable rate HELOC payment would be once it adjusts (if it adjusts... it probably adjusts).

Disclosure: i also am a loan officer, and i don't really like HELOCS. But I still offer them when they're in my client's best interest. 

IF you plan to take out the HELOC now with the intention of refinancing this home later to pay off said HELOC, then i would suggest you just do the cash-out refi. I say this because if you plan to refi the entire debt anyway in 3-5 years, you're just gambling with the interest rates. May as well lock-in low rates now, eat a slightly higher payment (if it is slightly... again, run the numbers). and if you can afford to throw more $ at it on-top of your new payment, you'll just pay it down more quickly.

Waiting to see what the market holds in a few years to move around this $50k could ultimately end up costing you a lot more if the rates jump up by then. they have been moving upward for the last year, year and a half. 

For $50k... it's tough to say without knowing your current 1st mortgage balance, rate, or payment. but i would guess that the stability of a cash-out refi would outweigh the benefits of a HELOC in your situation. you can ask your LO to structure the refi with no closing-costs. there are a couple of ways to do that, but i'll let your friend explain those options.

I'm not sure what your financial situation is @Joshua Smith, but I had a lot of luck starting out in the industry based on the fact that i was willing to work for free. no salary, no hourly, no "base"... just straight commissions. Dont get me wrong, I was flat broke back then, and living in my car. Yes, you read that right. To say it was hard would be a massive understatement.  

I agree with everything @Chris Mason posted above about training and low-hanging fruit. it's all true. But don't feel like you have to land your dream job right away. I have a friend who started with an escrow company while working toward her RE licensing. She knew she ultimately wanted to be a Realtor, but no one would hire her without licensing and experience. catch-22 right? She found the experience elsewhere, and is now doing what she wants to do after a couple of years. 

It's all about what you can bring to the table; and if you're willing to work hard for the success, it will come. Hope this helps!

@Kelly Pierce i was actually the tenant in a similar situation not too long ago. It is difficult being in those shoes and having the home sell out from under you. it's invasive, it's stressful, and it's expensive. The good news is California properties tend to sell quickly if priced right, although you know the real estate market better than I do in your specific property's area. 

Cash for keys is not a bad option if you think you can come to an agreement with the tenants. Waiting out the lease isn't always in your best interest, especially if you think the market is softening. It may be worth it to offer them something like their deposit back in-full immediately, along with moving costs (idk $300 for a moving truck?) and an extra $1000 toward their new rents/ deposits (just throwing something out there, i'm sure you can find what works for you to offer them). Get creative if you need to. But showing that you're willing to work with them will go long and far when it comes to them working with you on the sale (them accommodating showings and open houses). 

I read a horror story on BP not too long ago about a tenant that knew his rights, and followed them, but would do things just to make it uncomfortable. example, he would be in solely his bath robe for showings. It seems ridiculous but its not uncommon... or illegal, so tread lightly. Cali is very tenant-friendly, so if you go this route, make sure to consider the tenants and their needs. Even if just for the purpose of protecting yourself. 

@Marco Gonzales @Daniel Federico CoreVest is fantastic! We love them. They qualify you based off the cash-flow of the property. There are very specific value per-door requirements you need to hit on multi-family, and since it's based on cash-flow, you'll have to hit specific DSCR requirements as well.

Have you reached out to any local banks for this as of yet? It will be a bit more cumbersome to qualify for a loan through a local bank or credit union, but you might get better rates and terms...  

Feel free to send some info over to @Alex Bekeza, he may be able to help.

@Paolo Ruggieri What is the biggest issue you're having with what you've been offered? is it the up-front fees before closing? the balloon? the interest rates?

I don't know what you mean by "better" since that's subjective and could mean anything. What you've quoted above is actually a pretty good deal IMO! The rate is low for a portfolio deal, and if you're only paying a total of 2 points INCLUDING all of the appraisals and misc. title escrow u/w etc.... that's better than 2 points just to originate PLUS all of those extra fees...

If you're already experiencing this headache trying to find something yourself, I would suggest utilizing a Broker. You'll have to be ok with paying them for their services, although, I don't think all of them will charge you up-front. I know our brokerage only charges a fee if we actually CLOSE the deal for you. Brokers typically have good relationships set up with lenders they send business to often, and can sometimes help negotiate things you may not be able to negotiate if you call in directly. 

The thing with lending is that there is no one-size-fits-all. You may be very rate sensitive, whereas someone else may be very point/ fee sensitive. Obviously everyone wants the "best deal" -- but that means something different to everyone. And typically it's a trade-off. If there was ever a lender that had the lowest fees and the lowest rates and the easiest process, everyone else would be out of business. It's moreso about finding the best deal for YOU, and your scenario specifically. 

hope this has helped!

@Jon Graves personally, i wouldn't start out with friends and family in an investment deal, especially if you're new to it. sounds like a recipe for potentially ruined relationships to me, but that's your call entirely. If you choose to proceed this way, i would encourage you to set up an entity with these individuals to make sure it's all documented and ownership percentages are clearly stated. you dont want anyone to feel screwed in the end. Also consider who gets to call the shots. if you want to sell and the rest of your "team" doesnt... who wins that battle? Keep it simple while you're starting out and learning -- Just my 2-cents on this. 

As for lending -- it's totally going to be dependent on not only the people looking to borrow money (typically lenders will base their decisions off of ALL borrowers, and typically the rates and terms will be based on the weakest link), AND the property in-question. where is it physically located? what's the market like in that area? is it stabilized (tenants)? what expenses are you responsible for if-any on that property? how much is it cash-flowing? for more conventional financing, there's the added hurdle of income and documentation required from ALL borrowers, and usually conventional loans don't like entities. 

Some private and hard money lenders only care about equity. some private money lenders only care about cash flow of the property. rehab lenders may only care about the after-repair-value. 

it sounds to me a little early to start talking about financing, but it definitely doesn't hurt to find out what options are available and how. If for sure you're looking into rehab, I would reach out to some rehab lenders and get a feel for their requirements. or to make your life a HELL of a lot easier, find a Broker who specializes in such loan-types. not all rehab lenders are created equal, and some will be better or worse depending on your specific needs. Broker will help you navigate. 

Best of luck!

yes! but this post is way to basic to have any real answers for you. Any details you'd like to share @Marco Gonzales?

you shouldn't have any problem from the sounds of things. i would double-check with a loan officer who is licensed in your state just to be safe, but from my understanding (of your question), you could either buy the property FHA so-long as you plan to occupy one of the units, OR refinance it into FHA after you buy it (again, so long as you occupy one of the units).

you can get an FHA loan only on the property you occupy. whether or not you have other conventional loans on other properties is irrelevant -- although they would all be taken into consideration on your debt to income ratio.

IF you qualify for conventional loans, however, it seems silly to go with FHA -- typically FHA is for borrowers with lower credit scores or higher debt-to-income. The payments are almost always higher FHA than with conventional, so if you do in-fact have the ability to go conventional on your investment properties, i'm not sure how it would benefit you to take out an FHA loan on one you plan to occupy.

Hope this helps!

@Ryan Deasy you can try reaching out to @Alex Bekeza if you need a starting point. He's great! :)

Best of luck!