All Forum Posts by: V. Anthony Silva

@Dave Spooner

Lots of good advice above on educationg yourself.

Im a lender, let me give you some guidlines on buying your first 2-4 unit... FHA might be a great way to go if you plan to live in 1 unit.

min 620 scores,

3.5% down

You can use rents from other units to help qualify! This is huge!

If you get a job in the industry you are going to school for, it is possible to use the 2 or 4 years of schooling as the required "2 year work history in the same line of work"!

Thi means once you are permanent at a job, even if only a few months, you can use your income to qualify. (Otherwise you need 2 year work history in that field of work)

Check with a local Mortgage Broker in the area you plan to buy to confirm all of this.

I agree with John in talking to YOUR lender, but I will chime in a little.

Your current property is a rental so will be NON-owner occupied loan weather you refi now or later, and hopefully a conventional loan with 80% loan to vale? this helps get rid of FHA Mortgage insurance. This should also LOWER your monthly payment which should help with your NEW purchase and the debt to income ratio! If my client, I would do refi first or even as the same time as the purchase. If they are basically concurrent closings, the lender will use the new lower refi payment to help on the new VA purchases debt to income ratio. I do hope you are correctly claiming rents on the current property on your taxes!!!

If debt to income ratio is a huge issue for you on the rental you may need to refinance the rental and fully close on that property first.  Then go buy.   If debt to income is not an issue at all, then refi when you want, wont matter other then trying to save money ASAP and get rid of mortgage insurance on the rental ASAP!

Hope this helps?

It's a Good Life!

Brian, great point, yet not using my savings is why i havent been back in the market in 15 years!  Also, i do have 2 pretty decent 401ks if in a complete pinch. Plus 2 "investors" that i have lined up for future properties that have cash and want in ASAP.  But, that is why id like to flip and get that savings back and not use again!

Darius, I do know Pittsburg very well, and the plan is to invest and hold there in the future.  I have talked with the City which controls their own permits and such, not county.  I have also talked with 2 flipping buddies about Pittsburgs permit processes. So have a pretty good feel for that. 

JD, I do understand the benefits of Brrrr both long and short (2year hold) and why that is the main strategy for me. Thats why i struggle and have asked all of you advice on this 1st property with my savings involved.  I want that initial investment back ASAP ao i can play with "house money".  I am a poker player, pretty deep in it years ago, i started with $2000 of my "own" money and once i doubled it, i took mu initial $2k out and played with "house money" for the next 10 years, always keeping that poker bankroll separate from house budget.  Thats what i want to do in this business.  So that is why my thought is to flip the first and recoup!  Agent commissions are already accounted for, so i should net $50k, $30k after taxes on this first deal. To have $30k "house money" plus other investors coming. As for possibly flipping future properties, you have helped me understand that is not my future goal. Thank you!

i thank all of you, i need these other eyes on this and different perspectives and experiences. Much thanks! My next question is going to be what to do to start my business. Do i go LLC, to i get a book keeper? If i was your 21 year old son starting off, what would you tell me and what would you do differently? Im going to go start a new thread in the appropriate forum. But if any of you could share some time and advice please do. Im not sure if we can inbox each other on here? Very new to BP.

Caleb, yes those costs are factored in!  I used both the fix n flip and the brrrr calculators on here!  Ive been in the RE biz as a lender for 18 years, so have a lot of connections.  Ive passed deals to friends that flip, but now its my turn!

Curt, you are right it is easy to get spoiled on this deal, which is why i jumped on it to be my first investment in 15 years.  I am in East Bay area, CA.  Same area as David Greene, he is a buddy!   

Property is in Pittsburg CA. 2/1 880sq, bought for $285k with $7500 in seller credits. Appraised as is for $350k. Seller wanted quick off market sale, its a 1948 home all original. The 1 car garage is 80% converted into a bedroom, i am getting that permitted and adding a bath to make it a master. So i will be selling a 3/2 1250 sq home with $35k in rehab, my brother is a general contractor, (10k down, $5k holding cost) so in it for about $50k. ARV $430 to $450k. 4% realtor fees, 1.5% for listing agent ( long time friend and associate and the one that found property for me) 2.5% for selling agent which is standard in our area.

At $430k this is the ENTRY LEVEL price for a decent home is this area!  I am 90% now leaning towards flipping to get my money back ASAP, plus some extra money in the profit to use.  I have 2 other properties in my sights, but need to buy by the end of 2020.  If I Brrrr, i need to wait 6 months to cashout refi, which is something that is not mentioned too often when people talk Brrrr's!

Evan,

Thank you for your reply and thoughts on this issue.  I appreciate you sharing and i do see your points.  I may take the "BOTH AND" approach and leave the door open per property.  I will not be just go one way solely.

Thanks again

Yeah, Ive heard vets say that. thank you

First of all, thank you in advance for any feedback.

To keep it short and to the point. My 1st property i am fortunate to have the opportunity to flip or Brrrr. Here is my question.

I have $50k, which is most of my savings. This property requires an all in for me at $50k. If I flip, i will gross $100k, so get my $50k back plus $50k net profit. If i Brrrr, i can get about $60k cash out, so $50k back plus $10k, and cash flow $400 a month.

What would you do?

My thought is to flip this first one so i can get my savings back, and put it away, then have $50k "play money" to start Brrrring. I want to build wealth so Brrrr is my long term stratagey.

Im 80% sure i will flip and recoup all my money, but curious is anyone else has been in this situation and wish they kept the property?

Thanks