All Forum Posts by: Brittany Minocchi

Welcome @Solongo Ganbold!

Ohio is a great place to invest - Cleveland, Columbus, and Cincinnati are mentioned frequently on BP. I personally invest in Canton, but I focus more on cash flow than appreciation. I’d be happy to connect and chat if I can ever be of assistance.  

Hi @Amy Konopka

Interesting situation! As others have mentioned, there should be something written into your agreement in regards to the EMD. I'm always up for a challenge, so I'll check around on the recovery housing hurdle and see if I can find something for you.

What’s up @Adam Tamer! 

When you say 6 months of historical W-2 income… do you mean that you don’t have employment history prior to that since you were in college? If so, that’s likely where you’re running into issues with traditional financing. They want to see a stable 2-year job history (in general, not necessarily at the same job). Sometimes your time spent in school can even count as employment history. 

If you go the non traditional route, then yes, you can get a loan based on the income potential of the property that won't factor in employment, income or DTI. Since those aren't taken into account, FICO is important. Plan to have ~25%+ down, a higher rate and a prepayment penalty.

It's hard to say whether or not you'd qualify for a conventional refi after the rehab is complete….it would depend again on those same factors as before - how much employment history you have at that time, your income and your DTI.

Good luck! Happy to connect and discuss if you come up with any other financing questions. 

Don-Carlos pretty much hit the nail on the head, and I'll echo the part about possibly needing more than 25% down on a commercial loan like this. Don't forget all the extra costs as well. Commercial appraisals alone are quite a bit higher than a residential appraisal like you may be used to. I'll also add that your FICO is going to be a crucial factor in determining your rate and max LTV. I've worked with lenders that qualify the property and it's potential income more so than the borrower (with the exception of FICO and level of experience, no income docs required or DTI calculations), but expect the interest rate to be higher.

If you don't want to mess with your first mortgage because of the rate, you could consider a HELOC (line of credit) or a HELOAN (lump sum). With a cash out refinance you'd probably double+ your rate right now.

Hey Cody! 

Here’s my input: 

1.) Is it possible to buy a mobile home park as your first investment? Maybe. Would I recommend it? Probably not. That’s a big undertaking to start off with IF you can even find someone to lend to you on something like that with no experience and IF you have the down payment for it. 

2.) Different lenders have different loan limits. There are loans that use your income to qualify you, and there are loans that use the property to qualify you where your personal income is irrelevant, but the income of the property is factored in instead. That loan type will compare rents to your projected PITIA. Rents will need to meet or exceed PITIA. The question is - can you come up with the million-dollar down payment the lender will want? Expect 15% down on a single family, 25% for a multi family and 20-25%+ for a loan that qualifies the property instead of you. 

3.) It will come down to how the numbers work out and better you can get approved for a loan based on a 15 vs a 30 year term. They payment will be higher, so the lender will want to see that you're capable of making that payment. If you go with traditional financing, you can do a 30 year loan and make extra payments and get it done in 15 years if you want. Non-traditional loan types typically have prepayment penalties, but even then they aren't usually more than 5 years. Again - whether you as the borrower are used to qualify for the loan (using employment history, income and DTI) or the property is used depends on loan type. In either case, your FICO will be a big factor.

Hope that helps! 

 Sure do! 

Hey @Shuvrajit Mukherjee-

Cleveland is a popular area for investing and I don't think your criteria is out of the realm of possibility. 

Conventional financing should not be an issue at a purchase price of $85k, depending on how much you plan to put down- I see loan amounts around $50k pretty regularly. Expect a pricing adjustment to your rate for lower loan amounts, though. Many lenders just don't want to mess with these types of deals because there isn't much to be made on them. If you decided to go the non-traditional route, then I would say expect to find $75k+ loan minimums. Happy to discuss if you'd like to connect.