All Forum Posts by: Zach Wain

@Troy Smith - if you buy a new primary home its 5% down for a conventional loan or maybe FHA works as well with 3.5% down. You can leave your old home loan alone. You can do this every year if you want, its a great strategy to buy homes with minimal down!!

You must occupy the new home for at least 1 year.

Children buying a primary home for a parent is a great program. 5% down and renting 1 room out will obviously not cash flow well. If you like less down and staying more liquid, go for it! PMI is cheap if you have a great score, especially considering you are getting a primary mortgage rate and not a rental rate.

I love the program!

@Rene Ochoa Conventional loans will go to 75% max for cash out on investment properties.  Conventional loans will get you the best combo of interest rate, fees, and no prepayment penalty.  Full income/documentation

DSCR lenders will vary greatly, but 75% is pretty easy to do. But, the rates and fees will be higher then a conventional loan.

If you can go conventional, that is definitely the way to go!  Let me know if you have any questions.

@Armando Carrera is the property a Condo or townhome? $3800 seems high, but maybe that includes an expensive HOA?

If its in a community, double check the rules on STR's

@Nichole Bretag - While BRRR is still a good option in certain markets, I think it is much harder today then a few years ago. Doing a cash out refinance to recoup invested dollars is more difficult due to home values not increasing at 15% YoY. Also, DSCR lenders have lowered cash out loan to value guidelines, so cash out to 80% LTV is very hard to do.

Personally, I think the best way to add real estate is if you can buy a new primary home every 1-2 years.  Less down payment and lower interest rates.  But, it is not for everyone, you have to be ok moving into a new home every year or two...

I think this is a personal choice based on your investing appetite.  There is no wrong answer!  If you want to buy another home quickly, save money.  If you are buying a rental you get a better interest rate with 25% downpayment vs 20% down.  If saving more helps you put more down on the rental AND you want to buy quickly, consider that route.

If you are slow playing your next purchase, maybe you go a different route.

Personally, I do not mind being more liquid and collecting interest or investing in the market vs paying debt down, but that is me...

Cash flowing day 1 is tough.  First, if rates drop refinance and drop your payment.  Mortgage payments only stay the same or go down with a non cash out refi./lower rate.  Next, rates go up over time, so it will eventually cash flow.

Maybe you buy a new home every 2-4 years instead of every single year.  Do it at your own pace.  

Boom! what Colby said  ^^^^^^^^^^^^^^^^^^^^^^^  You can still get a conventional loan

@Angel Alicea - You would need $29k down total and you are good to go regarding loan size. That would be your total downpayment. Base loan size of $621,000. FHA has up front PMI that gets financed on top of the loan size, so your final loan size will be larger.

If you have any questions on how FHA loans work reach out anytime! There are a few important parts, like up front PMI/monthly PMI/underwriting guidelines that are worth reviewing. Sometimes, conventional loans offer better deals if you have excellent credit. You could do as little as 3% down since the conventional loan size is higher, $766,550...

That means you would only need to put down $19,500 for 3% down. That is something to consider as well. Great credit is needed for conventional to beat FHA

@Eric Lowder something to be aware, when you get your next loan, the lender will look at your schedule E to determine rental income from your property.  If there is no schedule, they will look at a lease and use 75% of the lease as rental income.  If you show a loss on your schedule E, the lender may decide to hit you with the full payment as a rental loss.  Maybe you can get an exception, but that can be 50/50