All Forum Posts by: Ashley Cross

I did it the traditional way with money I had saved the first time. Now that I have used a lot of my own capital and became more knowledgeable on how to use other people's money I'm using hard money and BRRR'ing to conventional financing. I also started to work with a partner to enable me to go to bigger deals. Its all an evolution and whichever way you start provides a learning lesson.

You are correct Erick. That was a loan program that was supposed to come back but never did. You'll now need 20% down for an owner occupied triplex and 15% down for an owner occupied duplex with conventional financing. 

Hi Aaron. Completing a cash out refi on your primary residence is a great way to get started is that is your only means to come up with the capital. With conventional financing you have to wait 6 months to pull equity before 6 months seasoning you are limited to pulling only the acquisition costs. 

You'll be fine keeping the 10 conventional as conventional. The commercial lender can dictate what financing you have for your other properties.

You aren't able to finance the down payment with unsecured debt. You also aren't able to get a gift for investment purchases on conventional loans. If you own a property or car free and clear you are able to have your relative write a note and you can get utilize the debt in that case. $50k is a lot to come up with so a car might not do it. 

It makes sense to pay for the appraisal upfront because that is an expense if the deal closes or not but I wouldn't pay anything above it. I have heard of another hard money lender charging an upfront fee but I would never pay that and I didn't move forward with that lender. 

Hi Uchenna! If you already closed on the property you don't need to inform your mortgage lender. When you purchased your home your intention was to use the property as your primary residence and you can't be faulted for having a change in your needs because of a family change. You will only need to explain this to your lender if you were looking to purchase another primary residence. Regarding renting the home, I would only move forward with this route if the property cash flows and you're able to sustain the housing costs while covering your other housing expense. 

Hi Michael! Regarding closing cost, Lenders can only charge a maximum of 1% of the loan amount for the origination charges we never charge that much & the appraisal for a duplex will be $775. Then you'll have title fees which will depend on the title company, I'd say $900-$1500 and prepaids which will depend on the property. If you are an authorized user on a credit card you receive the benefits of the payment history and the drawback of the balance affecting your DTI.

To add, that rate is really good for a cash out refi and I'd lock that up before the Feds raise the rates.

Hi Kelly! It stinks that your rate will increase a bit but if you get a higher return on your cash than 2.99% it makes sense to do the cash out. You'll need to be under 45% DTI for conventional financing on an investment property but if the subject property is cash flowing that won't be an issue. Good luck and Happy Holidays!