All Forum Posts by: Tyler Warrick

Hey @Erica Calella looks like a lot of people have contributed and I will back the Credit Union route (broker here). For reference, on an investment property (assuming the following: 300k first mortgage, 480k home value, 50k HELOC and 780+ credit) most brokers will have rates in the 12s with no lender fees. I haven't seen CU pricing on investment properties (only primary residence), but they tend to be about 0.5 to 1.0% more competitive than brokers. That being said on a $50k line of credit, the payment difference is about $40/mo at full draw. I would say it's best to establish a long term relationship with who you prefer working with/someone who can service your needs now and in the future.

Hey @Jake Healy, it all comes down to networking. I focus primarily on residential but have the ability to work on commercial deals as well (broker here). I've closed 3, so definitely not the most experienced on the Commercial Side, but in my experience a lot of these Commercial Lenders want to see a Personal Financial Statement. Assets go a long way, and the deal itself has to make sense (i.e. buying a strip mall, what will the rents be? Is there a positive DSCR etc.).

That being said, I'm curious to see what @Josiah W. can do with the 0% interest lines of credit. Any generic details you can share for us all @Josiah W.?

 Love the sentiment. Keep in mind if you need to use two jobs to qualify for a conventional loan, the borrower will need to demonstrate two years of holding those two jobs simultaneously. 

Now if you are planning on using a hard/private money loan -- lenders don't care about income. Assets (and experience) are the main factors.

Good take, and spot on with low interest rates killing it. I've had a lot of success with my property manager's going after Mid Term Rentals to supplement Short Term Rentals. For example, working with insurance companies who's clients home has been destroyed (fire, flood, wind etc). 

I'm not the biggest fan of insurance, but have to recognize they will pay premiums for their clients to stay in homes for 2-6 months as the insurance company gets the home back in order. Has been very profitable for me (full disclosure, this aforementioned property does have a sub 3% interest rate as well). 

It's a good question, @Rob Titus! You're correct in saying there is no "right" way to do it, just what is most comfortable for you.

Personally, I'm a fan of Hard Money to acquire the property. You'll get better pricing if you use the Hard Money lender to finance the rehab as well, however, the way it works is you must request a draw. This doesn't mean you have to request a draw through the hard money lender. A lot of my clients do this, and will either finance the renovations with 0% interest cards (if they have high enough limits), or use their HELOC.

Of course there are pros/cons to everything. Using credit cards/helocs could temporarily lower your credit score if they are maxed out (30% of your credit score is credit utilization), so keep that in mind. 

My takes are this.

Speed/enough margin in the deal/looking to buy and hold: Hard Money all the way through

Maximizing profitability assuming you are going to sell: Hard Money to purchase, 0% interest/HELOC to fund rehab

Hope this helps!

Congrats and welcome to BiggerPockets! The more you use this Forum, the quicker you'll find what information to include in your posts. As others mentioned, including goals in your post is huge that way others can tailor fit an answer to your specific scenario. I've heard great things about @Ray Hage so don't be shy in reaching out to him/sharing your goals with him! 

Looking forward to it!

Congrats on getting this closed! There are quite a few creative ways to accomplish what you're looking for. Private money is always a good option, but it seems like you'll be fighting for second position (FHA will remain in first position) on whatever option you take. My concern is that if your DTI was an issue before, it might come back into play with other options you're exploring. Feel free to PM me to go over more specifics.

@Dan Bitner My pleasure. It's refreshing to see someone who's actually thought things through! 

Acquisition: I dig the strategy. It's inevitable that rates will drop (who knows when -- that's the real million dollar question). I don't like banking on the fact that rates will drop -- because the timeline of when rates drop might not meet your timeline for refinancing. For example -- owner occupied properties will always get better rates than investment properties. If you decide to house hack and later refinance your investment properties, who knows if rates will make sense to refi. This is why I'm a fan of FHA/VA and the streamline refinances (before exiting into another house hack) because you can still classify that as owner occupied.

Exits: This is solid. I'll challenge you to come up with a plan to save for repairs/upgrades -- but that's a different conversation and outside the scope of what you're asking. Even if you aren't cash flowing right out of the gate (but not bleeding money, at the same time), you could use these rentals to offset your income come tax time. Looking into Cost Segregation once you formally move out of the property could also lower your tax burden (only bringing this up as you high a high paying W2 where you could benefit from write offs without shooting yourself in the foot for purchasing power/DTI).

I'm licensed in CA and can do Conventional, FHA, VA, USDA and all Non-QM loans in the state. Feel free to hit me up in a PM and we can talk more offline, if you prefer. From a brief super high level overview -- I like a mix of both FHA and VA for your plans. You can typically only have one FHA loan at a time (unless the properties are more than 50 miles apart). You could take advantage of both -- I'd recommend going with the loan program that gives you the lower rate/better terms to start as to make it easier/less stressful for your first hack. Once you've got one under your belt, it makes the second one easier. Additionally, I don't see you running into many issues getting qualified. Obviously I haven't seen any of your financials, but you'll be able to use market rents from the other units to offset a portion of the mortgage. As long as you don't have a couple Lamborghini's financed -- I think it's safe to say your approval odds are high.

You can choose a Fixed Rate Mortgage or an Adjustable Rate Mortgage. If you're only being offered one -- your lender is no go. Fixed generally have terms of 10, 15, 20, 25 and 30 year options (some lenders can do flex terms; i.e. 29, 28, 27 year etc). Adjustable normally have 3, 5, 7 or 10 year as the fixed period -- most are adjusting every 6 months after the fixed period.

Hope this helps.