All Forum Posts by: Zach Wain

Like Jake said - "What are your goals? When you say buy, do you plan on buying a primary? Buy and holds? Single family or multi? Getting financing or paying all cash? I really hate giving the "it depends" answer, but.. it depends."

If you are buying a home to live in, that is a different thought process vs a rental.  Also consider buying a primary home to live in for 1 year and you get primary home mortgage rates, the best pricing and lowest downpayment options around.  After 1 year, you are not required to live in the home and you can rent it out and keep your mortgage terms.  Than you can look at buying another primary home.

It is a slower strategy, but it works great for many people.  You do not need to (and most people cant afford) to buy a dozen rental homes in a short period of time.  Dollar cost average and get the best rate/terms possible

Great write up!

@Jovann Thompson you could buy a primary home with 3%-3.5% downpayment and live in it for a year while you fix it up. Then rent it out after 1 yr or sell and reinvest. Live in it 2 yrs to avoid capital gains

Hello All,

Each year the Federal Housing Finance Agency reassesses the conventional loan size and high balance/super conforming loan size limits. After some speculation, the analysts were pretty accurate. Most predicted a $545,000-$550,000 national loan size limit. For 2021, the official conventional loan size limit was announced at $548,250. For some high cost counties like Los Angeles County, the super conforming loan size limit for 2021 is $822,375.

This will also impact VA borrowers as well. VA loans are allowed to go above the national loan size limits, but the interest rates are higher once you cross that threshold. That will allow our Active Military and Veterans to get access to better interest rates at slightly larger loan sizes.

What does this mean for real estate?  In my opinion, the more access borrowers have to cheap money (conventional loans) the better it is for areas like Phoenix, Denver, San Diego, etc.  Places where sales prices have been creeping higher and higher and buyers of primary homes have to struggle with putting more than 20% down to stay at a conventional loan size or deal with high rate and difficult to acquire second mortgages.  This will boost affordability in many areas and help real estate values.  There are supply/demand concerns all over the nation and that is another topic, but this is a positive move for many areas and markets.

Cheers,

Zach Wain 

Broker

Wain Capital LLC

It is difficult on the lending side to do a cash out refinance on a small loan size.  There are Qualified Mortgage (QM) rules that are required to follow, basically banks can not charge you high fees in proportion to your loan size.  Small loan sizes max this very difficult to follow.  This is the downside of smaller sales price/loan sizes, financing can become more difficult for lenders to stay in compliance.

@Josiah Santillana

I just noticed you mentioned living in the home for 1-2 years, so being a primary purchase you have a ton of flexibility on downpayment. That’s a great way to start acquiring properties with the best terms possible

@Josiah Santillana

Feel free to send me a direct message or call/email if you would like to chat. I run a mortgage brokerage in Scottsdale and work with local and out of state investors. Depending your specific scenario and profile, there are some amazing rates and pricing scenarios for investors. 2-4 units homes come with worse pricing, and while 20% down payment is required you get a better rate with 25% down.

If you decide to work with another lender, I have no problem offering free advice.

Best,

Zach Wain

Wain Capital

@Philip Furlong keep in mind that FHA requires the home to be owner occupied by the buyer. If your friend had a bunch of rentals already sometimes underwriters will struggle with a 4plex being considered a primary residence.

@Ryan Cooley - Are you looking at a long term conventional financing?  Cash out or rate/term (no cash out)?  I would be happy to send you some rate/pricing info, PM if you are interested.  Post COVID many lenders have backed away from rental mortgage programs, essentially by increasing their rates drastically to avoid that bucket of programs entirely.  Some lenders are still priced aggressively, it varies greatly.  You will find your best deal with a mortgage Broker or a Correspondent Lender (they are similar, both are different from a traditional bank).  A Broker or Correspondent will have access to multiple lender rate sheets and program guidelines and than can find the best priced option for you.

I hope that helps, reach out for any questions.

Best,

Hi Harlan, I am a local lender and have a lot of experience with VA loan programs. Keep in mind that VA will only lend on primary homes, so this can not be a 4 unit rental property. You are allowed to live in 1 unit and rent the other 3 out making the home a primary home.

Regarding income, if you are currently employed (full time) and have been working for 6 months at the same employer than VA will use your W2 pay as income - assuming it is salary or hourly pay. They will have issues if you have commission or other variable pay without a solid 2 yr history, but salary and hourly pay are easy. They will ask for your 2 year work history and to explain any gaps of employment. Depending on how long the gaps are there might be some additional questions from underwriting.

PM me if you have more detailed questions or want to run through your scenario