All Forum Posts by: Brittany Minocchi

Any of those could be doable. I'm local to Canton and there are properties listed under $100k regularly, including multifamily. If you get a duplex for $100k and rent reach side for at least $700, there's a good chance one side will cover the expenses and the other will be cash flow....that's even if you decide to finance with the current interest rates. 

If you're planning to buy in the US, there are programs for those that aren't US citizens. If you have scorable US credit, you'll get better terms. If you don't have a US-based bank account, I would get one as that's a requirement by most lenders. Finally, be prepared to need a 30-35% down payment. Feel free to reach out if you have any other questions! 

Many lenders have a 6 month seasoning requirement to use the new appraised value, but some allow 0-3 months instead (they may require that rehab was completed, which wouldn't be an issue in this instance). This loan type is typically priced with a prepayment penalty which could be triggered with a refi, sale or any additional principal payments during that time. 5 years will get you the lowest rate usually, and buying it out (having no penalty) will be the highest. Again, usually. 

75% LTV is the max on a cash out with most lenders, some will go up to 80%. You'll see an increase in rate for that extra 5% though. If your FICO is on the lower end, the property is a STR/you're using potential STR rents to qualify, etc....LTV may be lower than 75-80%. Just a few things to consider :)

Feel free to reach out, I'm happy to help answer any other questions you have and walk you through the process!

Hey Alyssa! 

I'm in Ohio and would be happy to chat if you'd like to reach out. 

If you are doing the loan with Chase and they're telling you they don't focus heavily on DTI, I would take their word for it. Each lender can use their own methods of qualification on commercial properties, and most look mostly at the asset (with the exception of your FICO, experience level and reserves).

Is the extra $15k to cover your closing costs? If so, it may be difficult to find 100% financing unless you're okay with crazy terms or you're just looking for short term loan with a balloon from a private lender. If you can cover a down payment and closing costs, a debt service loan has limited documentation. The most time consuming part should be the appraisal. 

I was also going to ask if you'll have access to the property - many lenders will require an appraisal. With this being your first purchase, you may want to consider a property that's not being sold at auction. You'll likely need a higher down payment if you can find anyone willing to finance something like this as a first time investor; many require some level of rehab experience at the very least. There are lenders who work with first time investors, but it being an auction is what complicates things. Feel free to reach out, I'm happy to chat and discuss options :) 

What is your current SFH worth, and what LTV is the lender quoting you? What's the minimum amount you could receive that would make it worth doing the cash out? You might be able to do better on the rate, which would make the figures a little more favorable. Not enough info to say for sure...

If it currently rents for $3,400 and your PITI is $2,500 - net $900. If it jumps to $3,090 - net $310.

If you buy the next property and it rents for $3,250 with a PITI of $2,600 - net $650. Between the two properties you're cash flowing $60/mo more than you were with just your first property originally. Not a huge increase in cash flow, but you're picking up another appreciating asset.

Patrick did a great job explaining. If you've owned the properties long enough for them to be reporting on schedule E of your taxes, that income should be averaged out. If you recently acquired them or they aren't reporting on taxes and you have to use lease agreements or market rents, then 75% will be used. 

It's a decent tool, but as Greg mentioned, I'd definitely plan for a worst case scenario and make sure it cash flows at the highest interest rate juuuust in case.