All Forum Posts by: Zach Wain

@Corey Conklin - 100% Homerun!  This is the best post I have read on these forums in a long time.  I am with you and od my best to make my kids work for everything.  They have chores, they get paid for them, and I encourage/make them do a lot of work around the house and take responsbility.  Without that, what's the point of handing a spoiled kid that has never had to work hard in their life a ton of assets?  So they can be lazy and waste it all, and barely appreciate it?

I would rather leave my kids nothing but raise them to be hard working then vice versa

If we can accomplish both avenues that is the big win!  Create wealth that allows us freedom and choice, all while raising strong/hard working/independent kids that do not need us or anything handed to them.  

I think its still a viable model, but I think it will take a savy investor to do well right now.  

I think buying a new primary home every 12 months if the best way to grow a real estate portfolio.  You convert the old primary into a rental home.  It gets you the lowest market rates and the least amount of downpayment.  But that does not work for everyone.

@Tracy Mayfield - before you jump into a Hard Money loan or any other high rate/fee loan I would highly recommend professional credit repair.  Have you given that a try before from a reputable company?  I do not know what your credit report looks like, and credit repair is not a fit for everyone.  But, you need to improve your credit score.

For your next home loan, auto loan, whatever the case is.  A 560 credit score is costing you a massive amount of money in higher rates and fees.  I recommend you spend the time and money to attempt to improve your credit score.

I can recommend a company if you would like.

@Mashal Choudhry - Buy, Rehab, Rent out the property, Refinance (cash out), Repeat (buy a new home).

The theory is that if you bought a home for $200k with a $160k loan, and rehab'd the property, the value is now $250k.  Then you do a cash out refinance and get 75%-80% loan to value on $250k, so a new loan of $200,000.  The new loan of $200k pays off your old loan of $160k and you get the proceeds (minus closing costs) and you take that money and reinvest into new homes.

This method was amazing the past decade.  But, it is getting more difficult right now.  

1) Values are not increasing at the same levels.  That helped a lot of investors out, when they rehabbed the home gained value but the market also jumped by 10% in that year so it made their values grow faster

2) Cash out refinances on conventional loans got more expensive and restrictive.  75% max loan to value on a rental property cash out refi.

3) Rates are up, which is not a show stopper but it makes things more challenging to cash flow.

BRRRR is still an option, but I think investors need to be more dialed in then ever.

@Hunter Nall - There are a handful of loan programs to consider for your scenario. A Conventional loan will give you the best rate/pricing buckets at 60% and 70% loan to value. If your home value is $250k and you only need $115k - you are looking good. There are bank statement loans and DSCR as well, but conventional should get you the best overall terms.

In general, rates are very high across the board.  Today I am seeing the highest rates of the past 20 years, even higher then Oct/Nov of 2022.

 This is important.  The Fed does not base policy off our Gov't Debt issuance, but it has to play a role in behind the scenes meeting, policy making, and/or the next Fed president

Hi Ana,

Local vs non local will not impact rates or pricing.  Each mortgage company from big to small sets their own profitability models and their rates are based off that.  I have the same rates for TX as as I offer in AZ, CA, etc.  Guidelines are the same as well.

What is 10x more important IMO, is to find a mortgage officer that you can partner with for the future.  Find someone with competitive pricing, but also market knowledge, experience, speed, customer service, and any other criteria you find important.

Hi Sam,

I can not find a Fannie Mae/Freddie Mac guideline on this, because its not a standard home ownership/financing structure. It may come down to underwriter discretion. But, if they find you on title they will at a min count Property taxes/HOA/and home insurance against you. If they see on your bank statements a payment being made every month to a mortgage company, they will ask what it is and then count it against you. Can you count rents to offset it, great question? Is there a lease with your name on it, or the previous owner? I think its underwriter discretion, 50/50 on counting rents.

@Brandon Nguyen - Welcome home and thank you for your service!

I would need more details to answer your question. If the property was not listed on your 2022 tax return as a rental, VA will allow you to use a lease to offset the mortgage payment (or reduce the monthly liability). If it was on your schedule E in 2022 than it depends. Was it rented for all 12 months or only part of the year? Some lenders are not great about digging into the details of that part of the rental income analysis.

How much VA entitlement is used up? That could be a limiting factor and we would run that as well.

VA will allow a very high debt to income ratio on certain files, but we have a "residual income" calculation that still need to work.

So - it depends on the details...  I am happy to chat if you have questions and want to really dig into the scenario

@Ray Winner - The term is "delayed financing" and most lenders can handle this type of refinance transaction.