All Forum Posts by: Ash Hegde

The best use of 1031 exchanges is to keep them forever, because as you said, as soon as you sell you recapture all the depreciation you took from the beginning. I'm not an expert with 1031 exchanges but I believe there is a way to move into a passive investment through a Delaware Statutory Trust. @Dave Foster would probably know more about that!

It's true, you can pay extra on the principal but it will not change the payment automatically. You would have to ask for a recast, where they recalculate the payment based on the outstanding principal and remaining time on the loan. Some lenders will not do this. Some will charge a fee for it. Some will only do it if you've paid an extra "x" amount (looks like Wells Fargo's number is 20k).  

Hey Joshua, you are looking for hard money to pay the sellers for their equity when taking over their property subject to the original mortgage? This is a tough ask, as the hard money lender would have to take second position which most will not want to do. 

Hey @Ray Hage, if you are purchasing all cash and just want to cash out based on the purchase price, you can use delayed financing for this with no wait period. It is not ideal for a BRRRR with significant rehab as you won't be able to use a higher appraisal to take out more cash than the original purchase price though.

Where in Florida are you moving to? If you plan to invest where you currently live, which will be long distance after the move, go to some meetups now and try to network with people. You will need a good team to manage from long distance. 

Tommy gave some good information. It's a type of FHA loan so you'll need to live there for a year, but if your timeline is a few years you shouldn't have an issue refinancing to another loan (or even keeping it and moving out - unless you want to use FHA on the next one).

Depending on the scope of the rehab, it could involve extra paperwork and steps as mentioned. Lenders will have a list of contractors, but if you have a preferred contractor let the lender know and they may be able to get the contractor approved so you can use them. 

While scaling up, you generally don't want a lot of equity so a 3.5% down loan is great. You are correct that you won't be able to tap that property any time soon for equity, but you will be getting into a property months (maybe years) ahead of what you be able to do with 20% down. You can use that time to save up W-2 income while still collecting rent. Save up enough cushion to your comfort level before the purchase, but if you can get 3.5% down I would do it, even if you have the cash to put down more.   

If it's ok with your family I would use money for investing before doing more upgrades on a primary since it doesn't produce income, unless you want to use it as a live-in flip and sell when you are finished.

Flip vs hold is really going to be based on your goals. If you need a cash infusion, a flip would be better, if you are looking at a longer term cash flowing scenario then buy and hold.  

Kuriakos is correct, you should be able to use 75% of rental income to offset the mortgage for DTI and from your numbers it won't hurt you trying to qualify for the next property.

Appreciate you @Ray Hage. We'd be happy to help you and your clients any time @Alyx Magloire