All Forum Posts by: Brian Gorman

Hey Everyone,

I am currently working with a company who uses the Direct Lending method. I understand this allows you to develop a long term relationship with an lender, however does this cause you to pay a higher interest than mortgages some of the bigger "brokers" offer? I am analyzing deals for my first property and wanted to get some feedback on paths that others have taken.

For example, I know the credit union I bank with (BCU) which is tied and has a partnership to my corporate job with Target can land me some pretty good rates. The big concern is that they do not understand the investment approach though. I am open to learn as much as possible and would love to get some opinions on this topic.  

Best,

Brian Gorman

Hello everyone,

I just went through the process to get preapproved for my first house. I recently graduated from the University of Minnesota and have been working full time 8 months and have been able to accrue around 10k in liquid cash and around 4k in mutual funds which I don't plan to tap into, but can be accounted for in an emergency situation.

I was approved for 180k but plan to buy in the 120-150k range if possible. I was presented with the option to do a HomeReady mortgage that would allow me to put 3% down and still maintain a low 3.75% fixed APR. I am somewhat concerned about the insurance that is required when holding the loan. I am by no means about to pull the trigger on a house tomorrow, but I am starting my search and wanted to get opinions on this loan as well as see if anyone else has other ideas that may be better.

The plan for owning the property would be to buy and hold long term. I would take residence in the property, house hack renting out 2 bedrooms to my buddies to cover the base mortgage, and then I would cover any outside expenses and possibly put the extra money down on the principal. I would only look to take residence in the property for 2-3 years then turn it into a full rental to achieve that passive cash flow. I would then repeat the process on a new home with the end goal of accumulating multiple properties.

Below is an email that was sent to me by the mortgage lender I am working with which explains more in depth. Please let me know your opinion and feel free to offer any advice, I am trying to learn as much as possible at this point.

............................................................................................................................................................

From the lender:

I wanted to give you some links that explain the HomeReady program. As we talked about earlier, the main benefits of this program are the reduction in mortgage insurance from 30% coverage to 25% (lender jargon), which means your monthly mortgage insurance payment goes from $133.38 to $93.36 on a $150,000 purchase, and the other benefit is being able to put as low as 3% down opposed to the traditional 5%. The down payment does not need to be paid by you either (if you want to look into a gift from a relative, please let me know before you do anything).

I may have forgot to mention that there is a class that needs to be taken by you to qualify for the loan. This is an online class that will take about four hours and it costs $75.

Links:

This is information from Fannie Mae directly, but the program is called HomeReady and there is more information on the web if you want to do more research. They talk a lot about income limits on there, so before you get worried the income limit is $69,280, so you willbe fine.

I also attached an amortization schedule for you based off a $150,000 purchase. Keep in mind this only shows your principal and interest, so this is obviously not indicative of what your monthly mortgage payments would be, which we talked about earlier. The important number to keep in mind here is $117,000. That is when mortgage insurance falls off your account saving you $93.36/month. I highlighted the month that you should expect mortgage insurance to drop, which is month 110 or 9 years and 2 months into the loan.

Hello,

I am just getting started investing in Minneapolis and have developed a relationship with an agent who has since referred me onto a home mortgage lender. I am in the process of getting all of the documentation together currently to get preapproved and am looking to pull the trigger on my first home this summer. The plan is to house hack and rent to friends so they cover my mortgage while banking that excess cash flow to get started on another property after a year or two of living in the first property. I want to take a buy and hold pathway with the ultimate goal of creating enough passive cash flow to equal expenses then look into focusing full time on investing without a 9-5.

I was wondering what the best strategy is to take when speaking with a mortgage lender? I know shopping around is key to get the best rate, but I was just wondering if anyone else had any recommendations on the best approach to take when speaking with lenders/good questions to ask when going through that process.

I am very motivated and have been doing constant research about different opportunities and would like any information or recommendations on best approach that I can get my hands on. I am also looking for strategic alliances to help build my business, so if you are in the same boat feel free to connect.   

Best,

Brian Gorman

I am a highly motivated, passionate, futuristic, and goal oriented individual striving to better myself in every aspect of life. I have had an entrepreneurial mindset from the beginning and am currently doing everything in my power to make my dreams a reality. I strive to educate myself every day, learn from my mistakes, surround myself with passionate, like minded, and ambitious individuals, maintain a spirit of optimism, and most importantly have fun living out the dream while doing my part to drive humanity forward. I am extremely interested in real-estate as a way of generating passive income. I have a strong money management background as I spent one year working as a Financial Representative intern with Northwestern Mutual. This was a role that I was very passionate about and contribute to my success in a large part to up to this point. I have started investing in the market through a few different investment vehicles and am now looking to diversify my portfolio. At this point I am saving up for a down-payment on my first home through a mid/high risk brokerage account. The plan would be to own the home for a few years while building equity and renting to friends to cover the mortgage. I would then be able to channel the money I would be spending on rent into other properties to flip or rent in my spare time to create that passive income. I have read briefly on the industry and want to soak up as much knowledge as possible over the next couple of years before I pull the trigger on my first home.