All Forum Posts by: Shaun Weekes

I spoke to my tenant last week and he hasn't found a new place. I even sent him an option that was cheaper right around the corner from their current location that i found on Zillow. He wasn't aware but said he would check out the place. This tells me that my tenant is not proactively looking, or not looking very hard, because the house i sent him had been on Zillow for weeks.

June 1st is approaching and I don't know what I can, or need, or should do given the coronavirus situation in Los Angeles.

Obviously i want to sell to take advantage of the cap gains tax exclusion.

my rate is 3.25%, i charge 2600 for rent, mortgage is 2600.

Zillow rent estimate is $3000

What can i do in this situation?? SHould i sell and take advantage of cap gains tax? Move back in and cash our refi and then rent out to have cash flow? I am leaning towards selling now, and then watching the market to hopefully score some deals in the future...

Thanks so much for any insights anyone can offer!

-Jon S.

Can your renter qualify to buy the home?

1 Vote

Originally posted by @Brittani Kathryn:

My dilemma is this... I live and rent in Los Angeles. I recently came into a small inheritance that would allow me to purchase a property around 200-300k. There's a catch though... it would need to go to a place for my mother to live (ideally I'd like to find a place with a guest house that she can live in and then rent the main house). Obviously buying a single-family home with a guest house in LA for 300k is laughable so I'm looking into WEST Bakersfield (about an hour and 45 minutes from LA). I can't afford the 20% down (plus closing) but I could do 4% plus closing but then there's the whole itty bitty detail that I actually live and rent in Los Angeles... Sorry, this is so long-winded and who knows how foolish I sound but is there a way around the FHA primary residence rule? I do technically work remotely so maybe there's something there?

I know people that drive from Victorville to LA every day for work so it's not impossible, but Bakersfield is a star trek. Try to look for other areas in So Cal.

Also, work on getting a pre-approval so that you know exactly what you qualify for which will make your initial search much easier.

0 Votes

Originally posted by @Keith N.:

I want to know what the max LTV allowed is when doing delayed financing.

I had thought that for most lenders it was 75% LTV for SFR and 70% LTV for small multi-family (2-4 unit) properties.

Is this still correct, or has anything changed because of the coronavirus and banks being more strict with lending practices.

For Example: I but a duplex for $100K in cash. I want to immediately take out a mortgage after closing on it in cash. What is the maximum amount I can pull back out of the house when getting a mortgage on it. Is it $70,000 (70% LTV)?

For delayed Financing it's 70% for an SFR and 65% for a 2 to 4 unit. This is just for delayed financing.

1 Vote

Originally posted by @Tyler Krathwohl:

I'm wondering how investors are able to buy multiple properties per year using mortgages? I'm trying to buy my second property, but lenders want to see 2 years of tax returns on my current rental. How do you qualify for multiple loans in a short period of time without your DTI ratio getting too high?

You only need to prove that you've been a landlord for 1 year or property manager. You can do that with one year of tax returns and a lease agreement if the fair market days are less than 12 months. You need to work with a lender that understands investment type loans. The bank you're working with has OVERLAYS, which means that their bank requires more than Fannie and Freddie are asking for. If you have more than 1 year of experience as a landlord or property manager or you have a mortgage obligation that shows up on your credit report you can at minimum use 75% of the lease agreement to offset that properties mortgage payment.

Example:

Let's say you have a 1k lease agreement and the mortgage is including taxes and insurance is $500. If you have the 1-year experience you can use 75% of that agreement and $750 will now be added to your income. If you have no experience or less than a year but you have a mortgage obligation you can use $500 of that 1k only to offset the $500 dollar mortgage.

If you have less than a 1-year experience and no obligation on your credit report your personal income must cover the $500 dollar mortgage payment for DTI purposes.

So, depending on your unique situation there's 3 outcomes DTI wise.

0 Votes

@Jay Oca

Do you have a 401k, IRA or anything like that? Those will qualify as well for cash reserves. Is this your primary or an investment property?

0 Votes

Originally posted by @Rob Norris:

I purchased a rental property in September 2019 with hard money with the intent to refi out immediately. The property is livable as-is, and I currently have it rented on a one year least for $1,900/month. I can't get approved because I went from a W2 in 2018 to self employed in 2019. I have to get out of the loan, so other than putting it on the market, not sure if there is any other way to creatively finance or other lenders I should be speaking with?

3 bed, 1 bath, 1,800sf in East Nashville 37206

Purchase: $290k

Appraisal: $320k

Owe: $261k

I see that you're a RE agent. If your self-employed income is based on RE sales and you've had your license for over 2 years you can qualify for a 1-year tax return loan with Fannie and Freddie. Furthermore if you own a home currently and have a mortgage on your credit report besides the home in question or have more than 1 year of experience as a landlord or 1 year of property management experience you can use that 1.9K towards your income or to at least offset that investment homes mortgage payment. I believe Freddie will go up to 80% rate and term on an investment property which would get you up to 256K. You would have to pay about 10K or so, but you'd have a rate in the 4's as opposed to what you have now, and it will be fixed for a 30-year period.

2 Votes

Originally posted by @Aidan Fox:

I have a family friend who I’ve know for years who’s planning on listing their house on the market to sell within the next month. I am a 20 year old investor who has surrounded myself around real estate knowledge for the last two years and am ready to do my first deal. I have been working full time and saving everything for awhile now and have a good bit of capital and good credit score for 20 years old. I told them I want to buy the house but don’t know what lending strategies I should use or investment strategy. I would prefer owning it long term and use the brrrr strategy or should I just do a traditional rehab and flip. This house will sell and I do not want to miss my opportunity, what are your guys thoughts?

No matter which way you go make sure your research is spot on. I would lean towards the BRRRR method just because fix and flips during this time is risky because of values potentially going down further. At your age it's great that you're so into RE and I'm sure if you keep pushing and learning like a sponge, you'll have tremendous success.

Have a good one.

1 Vote

Originally posted by @Francesca De Laurentiis:

Looking to get a loan for a home and i have a lender that stated they will gift me a percentage of the closing costs. Wondering if thats a normal thing

You can receive a credit towards your closing costs, but your rate will be higher. The higher the rate the more you get towards closing costs and the lower the rate the less you get towards closing costs. So, there is no gift because you will be paying more per month. In some cases, it makes sense, so you should crunch the numbers and go from there.

I hope this helps and have a good weekend.

2 Votes

Originally posted by @Alex Stewart:

I am a real estate investor interested in LA, OC, and even Henderson, NV. I know this sounds like quite the variance but there are elements of all these cities that my family really enjoys. I have never bought a home in any of these cities and have just visited them many times due to my work. I need the help of anyone with intimate knowledge of these areas to determine which pocket should (hopefully) be the best long-term investment.

Currently my situation is this, we have been very blessed and are able to afford a very nice home in any of these areas (up to 4M). Here are the things we feel are a priority:

1. Long term appreciation

2. Walkability

3. Nice modern construction (possibly even a new build)

4. Close proximity to a cute uptown

5. Space

What pockets within these cities do you think best fits the bill?

Thank you for any wisdom you have!

Is this for a 2nd home or investment property? Appreciation should never be your focus unless it's forced. You need cash flow. But first you must figure out what your strategy is. Are you looking to execute the BRRRR, Fix and Flip or Buy and Hold? Once you figure that out you need to be a more specific. OC and LA counties are huge and have over 100 cities between the both. Henderson is attractive because the raiders will be in town soon and that's going to blow up rents etc.

At the end of the day figure out what strategy you want to use and make cash flow your primary thought. Appreciation is like icing on your cake. Obviously, CA homes will appreciate but this needs to be your last thought in my opinion.

I hope this it helps and have a great day.

0 Votes

Originally posted by @Christopher D.:

Thanks guys. @Lisa Eckman I checked with my current lender and a local credit union. They're offering rates in the mid to high 5% range. It looks like the rates I'll get through my mortgage broker are the best deal around, and I'll likely take it.

From the mortgage professionals in the forum ( @Shaun Weekes , @Nicholas Covington , @Alex Bekeza ) - do you think it's worth waiting to see if rates drop even lower? Seems like the Fed is not looking to go to negative rates, and lending requirements will only get stricter, so I'm leaning towards biting on this now while I can.

In today's market and lending environment I think a bird in the hand is worth more than 2 in the bush. Refinance now.

1 Vote

All Forum Posts by: Shaun Weekes

Shaun Weekes has started 33 posts and replied 1673 times.

Post: Stuck! Trying to Sell in CA, but CANT because of Tenants!

Post: Purchasing w/ FHA Primary Residence question

Post: What is the max LTV when doing delayed financing?

Post: Qualifying for Multiple Mortgages in 1 Year

Post: Lenders with no cash reserve

Post: Can't Refi Out of Hard Money

Post: Brrrr strategy or flip?

Post: Can a mortgage lender gift you 1%-2% to put towards closing

Post: Los Angeles vs. Orange County vs. Henderson??

Post: Cash-Out Refi on - Lenders Asking >40% Equity and 4% Rate???