All Forum Posts by: Andrew Garcia

@Iris Hou, if you are worried about future rate hikes and are comfortable with today's rates, I would get a mortgage now rather than 6 months in the future. 

Then, you can lock in today's rate. If you still feel comfortable buying the second with a mortgage, you can certainly do so but if rates go up past your comfort level, you will know that you have capital to deploy without paying those rates.

If rates go down, you can just refinance this one and get a mortgage on the second property.

I feel this would be the best way to remain safe with your concerns.

@Diwas Sherchan, I see. So you wrote off a lot of things on your taxes so the underwriter cannot show enough income to qualify. Got it.

That means that you cannot go FHA or conventional. The good news is that there are still options.

1. DSCR loan. They qualify you based on the fair market rent of the property, not your personal income.

2. Net Rent loan. It is essentially like conventional or FHA but they calculate your income based off of lease agreements, not tax returns. The rates are better than DSCR but the underwriting is stricter.

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

Hi @Greg Thomas, since you are renting it out, you would need to claim it as an investment property on your mortgage application.

Second homes do get slightly better pricing but it is not worth the risk of getting caught and committing mortgage fraud.

Self-employed should not be an issue as long as you did not write everything off on your tax returns and you have been self-employed for two years.

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

Hi @Matthew Rubino, you could look into a DSCR loan where they base it on the proposed income of the property rather than your personal income. You could also look into a non-QM loan where they calculate income a little differently.

Let me know if I can be of any assistance.

 The rate hikes from the Fed are already priced in. The Fed hiked rates last week and mortgage rates went down because the hike was lower than expected. 

You can certainly use that strategy but the rates might be worse in 6 months when you refinance. If you do not need the money, you can wait until rates drop back down to the 3s or 4s and then refinance but that is the risk you run going with that strategy.

Hi @Diwas Sherchan, if you are buying as a primary residence, why would you go DSCR? You could if you wanted and they would use the 1007 from the appraisal to determine the ratio but there are better products for primary residences.

If you were to go DSCR, you would not need to show your taxes or calculate DTI. You could use a conventional loan or an FHA loan with 3 or 3.5% down, respectively and use the saved money to do an 80% DSCR loan on a different investment property.

If you do not qualify for those programs because of your tax returns, you could do a net rent loan which has a slightly better interest rate but will be stricter in underwriting.

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

Hi @Ben Morand, the conventional loans with 3% down are only for first-time homebuyers. However, FHA is not only for first-time homebuyers.

Therefore, they could use 3% down conventional today and do FHA a year later, but not vice versa.

They could do a 3% down conventional today and a 5% down conventional in a year or an FHA today and a 5% down conventional in a year.

Hope this helps!

Hi @Katalina Mendoza, are you looking to buy a house hack opportunity or are you looking to rent? It sounds like you are looking to rent but just want to be sure before I can provide any feedback.

Hi @Chris Oster, seller financing doesn't really have loan programs. They have terms. A typical term is a 30-year amortized loan with a 3-5 year balloon payment but it is really whatever you and the seller decide.

Is that what you were looking for?

Hi @Tim Wolak, welcome to real estate investing! 

Your answers cannot be answered in one or two sentences but I will try my best.

1. Capital: It really depends on the area you are looking in and what strategy you are going to employ.

2. Flipping: Yes, you can. You need to ensure that you hire the right contractors and get the right deal, however.

3. Legal: Talk to a local real estate attorney.

I know those answers are vague and don't help much but if you want to go deeper into your scenario, let's get connected. 

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