All Forum Posts by: Andrew Garcia

Hi @Olga Buchonina, more information would be needed but thank you for providing a few more pieces of information. I can refer you to a lender that can help if you would like.

Feel free to reach out and I will get you connected.

Hi @Megan Ratigan, first, welcome to REI!

The best way to get personalized advice is to ask experts in that area. Luckily, you are part of a community of over 2 million members that specialize in something.

Build your team consisting of experts and they will be able to help you develop a personalized strategy to achieve your goals in REI.

If you would like any recommendations for professionals in Atlanta, I would be happy to refer you to them.

Hope this helps! Let me know if I can be of any assistance.

@Jonathan McEntee, there are a few different options.

1. DSCR based on LTR rents.

2. DSCR based on STR rents. This is similar to the DSCR based on LTR rents except that it uses STR income. This program is not nearly as common as the DSCR based on LTR rents so the terms may not be as favorable.

3. Conventional. This will get you the best rate but you cannot close in an LLC, and your personal income will be used to qualify.

I can refer you to a lender that does all of the above financing for STRs. Feel free to reach out and I'd be happy to help.

Hope this helps!

Hi @Anthony Alvarez, first of all, I am sorry for your loss.

As for your strategy, a HELOC is a good option to fix up the properties and then refinance them to pay off the HELOC and get some cash to buy that SUV.

You mentioned house hacking and BRRRRs but you can do both. You do not have to choose one or the other. House hacking does not take much upfront capital so you can pursue both options.

When it comes to accounting, I would hire a CPA. They can give you tips on how to make it easier on them but staying organized will help tremendously.

Since you have only been at your job for 18 months, you could pursue an option that does not take your personal income into account. For example, a DSCR loan. This is a loan where the income of the property is used to qualify rather than personal income.

Hope this helps! Let me know if I can be of any assistance.

Hi @James Pecora, they say they offer conventional and FHA loans but they do not have their NMLS # anywhere on their website which is blatantly illegal.

Hard money and commercial lenders may not be licensed but conventional and FHA lenders must be and are heavily regulated. That means either they cannot do conventional and FHA loans and are lying for some reason or they can do them and are licensed but are not showing it anywhere in an attempt to deceive the borrower so they cannot file complaints or read consumer complaints against them.

Either way, very shady. I would stay safe and stay away. If you would like a recommendation, I would be happy to refer one to you.

Hope this helps! Let me know if I can be of any assistance.

Hi @Matthew Phillips, welcome to the community!

House hacking is the best way (in my opinion) to get started in REI.

Since your biggest hurdle is capital, in this market, you can get seller concessions to cover your closing costs. Additionally, for 2-4 unit properties, FHA allows 3.5% down.

I am not familiar with the Newberg market but depending on the rents in the area, you could also be saving hundreds or thousands of dollars by having little to no mortgage payment.

As for how to determine what a "good deal" is, a local investor-friendly real estate agent will be your best resource for this in your market.

Hope this helps! Let me know if I can be of any assistance.

HI @Nick Hensley, welcome to the community!

You are definitely in the right place so I have no doubt you will buy your first property next year.

Excited to have you here! Let me know if I can ever be of assistance.

Hi @Rahsheen Slaughter, there are a couple of risks to watch out for.

1. Rates rising. The rates rising will cause your HELOC payments to increase since HELOCs are ARMs. Additionally, the refinance rate will be higher than the rate to purchase upfront. You could continue holding the HELOC and paying the IO payment until rates drop again but if you want to free up your HELOC to purchase other properties or use it for other purposes, you cannot.

2. Property value deflation. If the property value decreases from the time you purchase to the time you were planning to refinance, you may not get enough equity from the refinance to pay off the HELOC.

3. No principal buydown. Most HELOCs are interest-only so there will be no principal buydown from the time you purchase to the time you refi.

4. Higher monthly payments. Since you are borrowing cash to purchase a home, you will need to pay a certain amount per month for the IO payments on top of hard money, renovations, utilities, etc.

With that being utilizing HELOCs will allow you to grow your rental portfolio much quicker so it can be a great strategy as long as you account for the above risks.

Hope this helps! Let me know if I can be of any assistance.

@Joshua Zdunich, you might want to explore other options that keep your 4% rate in place such as a HELOC.

This would allow you to access equity to buy out your partner without refinancing. However, they would still be on the conventional lien. 

You also might be able to reach out to your servicer and ask for an exception allowing you to take over their liability but I would not get your hopes up.

Since it is conventional, it is not assumable but if you review your docs, the mortgage might have a liability release clause. You would still need the lender's approval so you will have to show income docs and show the ability to repay the mortgage by yourself.

If your servicer is not cooperative, I do not know of any other way to get their name off the mortgage other than refinancing.

Hope this helps! Let me know if I can be of any assistance.

@Heath Shepard, the issue you would run into with a Texas cash out refi is with 50(a)(6) if you are trying to do this on a primary residence.

In that case, there would be other options to explore.

Alt-doc or DSCR would be your best bet. If you would like a referral to a lender that handles these types of loans, let me know and I'll get you connected.