All Forum Posts by: Tyler Warrick

 Even if you breakeven/slightly negative in cash flow -- sounds solid to take the money. Rents will likely continue to increase which will help if the goal is long term hold. 

@Caroline Gerardo knows her stuff. MCC is huge if your state allows for it. Could easily be the answer to your DTI issue.

Now we're talking! Thank you for the clarification, @Dan Bitner. 

Let's talk about acquisition strategy and exit strategy. Acquisition - are you looking to cash flow immediately? Or just cover the mortgage payment? Exit - do you plan to refinance (rate and term or streamline to drop the rate/increase cashflow? or cash out to fund the next investment?)?

I'm a fan of VA financing as it gives you fantastic terms -- it also allows you to do a streamline refinance (no income, no appraisal required). FHA allows for a streamlined refinance, too.

I'm a fan of FHA down payment assistance as it allows you to walk in with instant equity and no/low cash out of pocket -- the trade off with DPA (down payment assistance) is that you'd be getting a slightly higher interest rate. If you plan on staying in the property for a year, this doesn't concern me, as you can streamline refinance after you've made your 6th payment.

Let's circle back to goals -- I like the overall goal of 10-12 units and a total valuation of +$5M. Do you plan to access the equity you accumulate? Do you have other means of saving/acquiring capital for future RE Investments?

FHA loans can get AUS approval up to 57% DTI. There's always a way to make the loan work -- you just have to get creative.

Did the home appraise for 345k or more? If more, increase the purchase price, increase the concessions to a full 6% and that will reduce your Funds To Close (slightly, but it seems like every little bit will help). 

If you have any installment loans, you can explore paying the balance of those down so that you have 10 payments or less remaining (this will allow you to exclude them from your DTI calculation without having to pay off the entire loan balance).

Not sure what rate you have, but you could also explore DPA (Down Payment Assistance) FHA loans. That would save you an additional 3.5% of the purchase price to put towards the Tax Burden.

In my opinion, it sounds like you just need a creative way to get into the home. This loan will not be your forever loan, and a refinance is inevitable. Let me know if you have any other questions. BTW -- what state are you in?

 This is for Conventional financing. There are other alternatives that can get you more cash, quicker. Let us know what you're looking to accomplish and we can provide more details.

Find a broker and ask if they use Spring EQ or Button Finance. They go up to 95% CLTV.

Local credit union, in my experience, will take a loss on their HELOCs (good for you, the investor) to earn your business. 

Love these scenarios! It's all about numbers, and breaking it down easily. There is always a loan available. The question is simply: does it make sense?

If your friend makes $200-300k/year, and they claim all of their income (no write offs) -- they are either in the 24% or 35% federal tax brackets (unmarried/married). 

Non-QM loans such as: Bank Statement, Asset based, P&L etc offer rates anywhere from 1-2% higher than conventional.

Easy equation. But first, let's break down the constants: $600k purchase price, 20% down (assumption), 6.5% rate (assumption)

Conventional -- Year one interest paid: $31k plus whatever tax implications from scenario above (+$48k in the smallest example)

NonQM -- Year one interest paid: $41k (paying no taxes -- assuming your friend continues to write everything off)

Let me know if you have any other questions.

Hi Dan -- what are you ultimately trying to achieve? There are tons of programs out there, and if you share a little more details I'm sure I can provide a couple more options.

Some things to consider: Will you be occupying any of the units? Are you planning on fix/flip, BRRRR, STR/LTR? Do you have any cash out of pocket restrictions? What is the price range you're looking at?

Happy to help! 

I would steer clear of Rocket (direct) as they'll be extremely overpriced. If you are looking for Conventional Financing, you can't lose with a broker as they get wholesale rates and can work with multiple lenders to shop your loan.

If you're looking for Non-QM mortgages (DSCR, Bank Statement, P&L) because you don't qualify on traditional means, you'll likely need to work with a broker or other specialized lenders such as Private/Hard Money.

If you're looking for Conventional financing, let me know and I can get you connected with someone licensed in IL. If you're looking for Non-QM financing I can assist.

If you are purchasing from a close family member, I would suggest a gift of equity purchase. We're missing quite a bit of info to make real suggestions, but the things I'd like to know are:

1- estimated value of the property

2- how much money does the close family member want to walk away with?

3- if there is an existing loan on the property, how much is it?