All Forum Posts by: Alex Manley

@Mike Ojo Welcome to BP! As @Marty Johnston noted, most standard conventional lenders will require anywhere from 6-24 months seasoning before a refinance goes through. However, there are lenders out there that will require little to no time at all. Typically, you would want to look at either portfolio lenders or local community banks, as these types of lenders will be more flexible in what they are willing to do.

Additionally, it may be best to wait to refinance until the property you are rehabbing has been filled with tenants. This is due to the way that lenders qualify the income from an investment property. Some will require at 1 or 2 year waiting period before counting rental income, while others will apply 75% of the rent as income. This will vary from lender to lender, so you will need to speak with them about their income qualification process.

One final note would be to beware of any pre-payment penalties.  While these are much more common on commercial real estate loans, it is always something to be aware of if you are using a private lender. These can run very high, often anywhere from 1%-5% of the principal paid off.

The BRRRR strategy seems to be an excellent one, and is the strategy I plan to pursue on my first house hack. Good luck on the Refinance portion of the strategy.

@Katie K. Welcome to BP! I am also relatively new here on the site, and I am going through the same process of finding my first investments. Since you mentioned you are looking to house hack, have you considered refinancing out of your FHA on your current house, and using a new FHA loan to purchase your house hack?

With the right LTV on your current property, you may be able to refinance out of it into a conventional loan, allowing you to utilize a new FHA loan. While it seems your lender is not comfortable at a high LTV, there are lenders out in the marketplace currently doing as little as 5% down on conventional loans. All this is based on the assumption that you would keep the house you are currently living in, but rent it out. FHA requires owner occupancy of the property for at least 1 year, so you would need to move into the new property.

Regarding HELOCs, @Igor Avratiner has it right.  Your average bank will typically not exceed 80%. You may get lucky with a community bank or portfolio lender that is willing to lend up to 90%, but those are rare, and interest rates can be very costly with so much leverage.

Good luck on your financing hunt, and with your future investing.

@Jason Fernandes

As both Leo and Steve have mentioned, portfolio lending seems like the best option.  The majority of portfolio lenders are smaller than the average lender, and as such, need to be more flexible in terms of what types of loans they will pursue.

I would also add on that you will most likely have much better luck with the local community banks and portfolio lenders than with credit unions.  As a whole, they tend to be more risk-averse, which is a result of the unions being owned by the depositors at those institutions.

Good luck on your financing hunt!

@Andrew Johnson Thank you for the response. I have been tracking my activity, in the sense that every Tuesday, Thursday and Sunday night, I take a look at the listings online, and add any new 2-4 unit multis to my excel tracking sheet.

Criteria wise, I am looking for a property that matches the 2% and 50% rule, and is under my limited budget of $235k. As the search has gone on, I am adjusting my expectations of finding one that matches the 2% rule at that price point.

I haven't made any offers, as the prices I would need to make it work would in many cases be less than half the asking. Is this something I should be doing, regardless of what they are asking for the property online?

Based on everything I have read here on BP, the most important part of RE Investing is finding a great deal. My question is simple, but the answer no doubt complicated: How?

I have been using lots of online databases (Realtor, Zillow, Trulia, Craigslist, etc.), but none of the online inventory in my target markets (Aurora and Elgin, IL) really works as a buy and hold investment. I have also talked with 2 agents with 0 results. 

I am sure there are other ways to find deals, I'm just not sure what they are. To any BPers out there who can tell me what I need to do better, what should I do to find my first deal?

@Craig Koehne The lender you are working with may have the policy that they only count rental income that is only over 2 years old, but there are other lenders out there that will count the income, as long as it can be documented.

Some will require the signed lease, and some may even request verification of monthly rent payments or the security deposit. The standards will vary from lender to lender. 

As others have already mentioned on this thread, there are definitely lenders out there that will count the income. The challenge will be finding them.

As an aspiring real estate investor (hopefully formerly aspiring very soon), I have seen lots of articles and posts about how to be an effective wholesaler, but I have not seen anything about how a buy and hold investor can find and work with a wholesaler.

So how does an investor find a wholesaler, and then what does the working relationship look like from the perspective of the buy and hold investor?

Additional question, is it better for a new investor to work with a wholesaler, or with a real estate agent? I am currently working with two real estate agents to find a multifamily to house hack, but so far haven't had much luck.

@Jeff Johnson Glad to hear I am not the lone madman out here in St. Charles that thought there might be something to this real estate thing.

@Veni F. Thanks for all the links, they are all very helpful.

@Mark F. I will be sure to follow up with you over a PM...once I figure out how to send one. Hope to contact you soon

Hello fellow BP users!

My name is Alex Manley, and I am an aspiring real estate investor currently living in Saint Charles, Illinois. I found BP 6 months ago, and after binge reading endless blog posts, I figured it was time to quit passively using the site and join the forums.

For a little background, I am relatively early in my banking career, and a complete newbie as a real estate investor. I began in banking as an in-house accountant, and I am now working as a commercial credit analyst for a community bank. After underwriting dozens of investor real estate loans, I began to see real estate’s potential to build wealth and cash flow.

Currently, I am trying to find a multi-family to house hack as my first investment. I have been looking all over the Fox Valley region, and I am specifically looking at Elgin, St. Charles, Geneva, Batavia and Aurora.

I am really excited about the chance to network with everyone here on BP. After seeing the quality of the material available on the blogs, it is safe to assume that this community is knowledgeable, experienced and highly engaged. While I may not have any real estate background or experience, I hope I can be a contributive member here on BP. Looking forward to interacting with you all.