All Forum Posts by: Andrew Garcia

Hi @Gabriel Flynn, that is going to be a tough sell. $35,000 for a gut reno at that size is likely a little low. Especially if it is a teardown.

Additionally, the flipper is not making a ton of profit on that, especially with all the work required. If you can sell it, that would be great but the numbers are not looking too favorable. That's just my two cents.

Hi @Bryce Platz, yes, Rocket being the servicer is normal. However, the charging discount points and it increasing by half a point is not. If you are checking in every week, the rate should not have jumped up half a point with discount points. Especially since rates have improved since last week. The loan officer might not have been completely truthful with you upfront.

There is a huge difference between going with Rocket's retail division and a broker when it comes to pricing. Pricing is determined by 11 factors. 9 of which are determined by you (loan type, occupancy, credit score, etc.) and 2 that are outside of your control (lender/broker profit margin and market conditions). Rocket's retail division is on the higher end of the scale because they have super bowl commercials and basketball stadiums to fund. Most brokers charge between 2.25 and 2.75%, which makes them comparable. 1.75% is really the lowest you will get. I have not seen lower except for some internet lenders during the refinance boom.

In some cases, Rocket is better than brokers. In others, brokers blow Rocket out of the water. It really all depends on who you work with.

Hope this helps! Let me know if you have any questions.

Hi @Campus Johnson sometimes local banks and credit unions are stricter on appraisals. You can check with them, you might be able to order another appraisal. Otherwise, you might have to ditch this lender until the appraisal expires or find another lender.

Hi @Travis Moe, I agree that you should be looking for a higher ROE. Your math is correct. I see two options:

1. Andrew laid it out well. You can sell and either do a 1031 exchange or pay the taxman and redeploy elsewhere.

2. You can refinance to pull out some of your equity and deploy that equity somewhere else.

I personally recommend either the 1031 exchange or the refinance. The selling is not a great option because, sure, you have $100k more to deploy but you are giving up nearly $250,000 in equity as well as a property that is breaking even. If you cash out at 80% LTV, you are essentially wiping out your current cash flow. However, you now have nearly $400,000 to deploy to make at least $20,000 a year. As long as you beat that, you now are capturing the appreciation of both properties, but you are also making the same, or possibly more, cash flow.

The 1031 allows you to redeploy more assets that might give you better appreciation and/or better cashflow.

You seem like a savvy guy so I am sure that you will run your numbers to determine what makes sense for you. Let me know if I can be of any assistance.

Hi @Darryl Griffin-Simmons, lender here. You could do an FHA loan but you would have to live in the property you are purchasing. You could live in one unit and rent out the other units.

By not being on the mortgage do you mean the current residence or the property you are going to purchase? You could also pull out some equity from your current primary and then buy another investment property. That way, you have two investment properties (current residence + new one from proceeds of refinancing) and a house hacking primary residence.

There are a lot of options for you but it depends on your goals. Let me know if I can be of any assistance.

Hi @Haley Henderson you never know what you will be approved for until you talk to a lender. If not, you could always do seller financing or lease arbitrage. Additionally, you should look into DSCR loans. They qualify you purely on the proposed income of the property, not your day job. Let me know if I can be of any assistance.

Hi @Bruno Lobo Motta, the only foreign national programs that I am aware of require at least 20% down. Maybe you could try seller financing.

Hi @Eric Abel, I looked into this but an attorney told me that it is illegal unless they give you permission first. If anyone else in the BP community has done this legally, please let me know.

Hi @Edwin Wong, I recommend you shop with 2-3 different lenders to make sure you are getting the best deal possible. 

I am going to be honest, my company does not have the best rates for HELOCs but we are very competitve on DSCRs. Credit unions are often great for HELOCs.

 Yes, the documentation is basically the same. You might need to provide current lease agreements if you are taking over the lease but everything else is pretty standard.