All Forum Posts by: Carlos Valencia

Hello Sara, 

If you have no monthly income how are you going to pay for the mortgage? Even with 30-40% down. I'm assuming you will have some money still left over after putting down that 30-40% down after closing costs. What is your game plan in terms of surviving and paying off the rest of the 60% of the mortgage? Unfortunately many lenders will see this as a red flag and may not take the risk to lend you the rest of the money even if you use stated income program or bank statement program but those are for self employed borrowers who have active income from their business but write off to many expenses that when filling their taxes their net income is really low or sometimes negative. Therefore these other programs are good option for those business owners. But at the end of the day there is active income to account for. In your case there is nothing other than just having your remaining equity and money left over from the start up. Unless you can show any type of active income from self employment, retirement accounts, disability income, rental income just something and enough to qualify then you will be able to find a lender that will lend to you. Only option for you would be DSCR loan but that is for investment property so unless you are just trying to acquire another property to build your real estate portfolio then that is the best option for you. The final option is just purchasing cash if you can find a property for 450k . The you drain all of your savings unless you have more and how will you pay your taxes and insurance? I would wait to start that new venture you mentioned and see how that goes because last thing you want to do is get yourself in a situation where you lose everything. Stay where you are and live below your means until that new venture takes off.

@Albert Bui @Matthew Kwan

Hello Brittane, 

You either will need to find other investors that will partner with you or if you have enough experience and the deal is good enough you might be able to get 90% LTV. Another option is to see if a private lender can lend you the down payment money as well. It will all depend on the deal and your experience. If you put yourself in the lenders shoes and think about the risk of the deal and worst case if the borrower defaults what is in it for the lender? If the lender keeps the property can they offload it for a quick profit or will they be stuck with a project that will cost them more money than what its worth if the deal did come thru. Things to think about when investing as its a two way street for the investor and the person with the money.

@Albert Bui @Matthew Kwan

Hello Daniel, 

Welcome to the BP community. I would suggest once you move back to the US try to attend real estate networking events where you will be able to network with all types of real estate investors from newbies to experienced investors. Another thing to keep in mind is to make sure you have an active income to help you have more options in terms of the strategy you will use to begin investing. If you can start now even better since you have your active income from being a professional soccer player. Not sure what you plan on doing for active income when you retire but also the higher the income the better. Otherwise with no income you are looking into just buying all cash or using a loan called Debt to ratio income to purchase investment properties where you use the rent to cover your mortgage but you will need to put down at least 25% down of the purchase price. Best of luck with your soccer season and real estate investing.

@Albert Bui @Matthew Kwan

Hello Kilroy, 

When it comes to appraising ADUs it will basically be left up to the appraiser. Unless you live in area that has many ADUs already built that have been sold with the home or as individual parcels. Even if you do find a lender that will use the appraisal that incorporates the ADU just know that the value will either help with getting a larger Heloc or it might not do much to help your case. You will have to pay for an appraisal to and depending on what the value is it will be up to you to determine if you want to proceed or not.

@Albert Bui @Matthew Kwan

Hi Cameron, 

My team and I host monthly real estate meetups in Bellevue. If you are interested in attending the next one feel free to DM and I can share more information about the next event. 

@Albert Bui @Matthew Kwan

Hi Mic, 

The amount of capital needed will depend on the type of strategy you are trying to use. Ideally tho it good to have at least 6 months of reserves in terms of overall mortgage payments. No matter the strategy so you can be ready in case anything happens where you lose your active income or a tenant moves out without notice whatever the case may be. Lowest capital strategy I would say is the house hack method. House hacking is when you buy any 1-4 unit property as your primary and rent out the other units or rooms to help cover your mortgage. The overall goal is to get enough rents to cover your mortgage and live for free. Also upon move out you can potentially cash flow. When doing this strategy you will can put down as low as 3.5% -5% down. You live there for a year then rinse and repeat. There is more things to consider when using this strategy its best to plan ahead and begin the mortgage planning as soon as possible so if a deal comes along you will be ready to execute. 

@Albert Bui @Matthew Kwan

Hello Kelly, 

House hacking is alive and well and yes depending on what market you are in it will be challenging to acquire something that will allow you to live rent free. The best way to position yourself to have better cash flow is to buy a property that is livable but needs rehab. Acquiring a property that needs rehab allows you to build that sweat equity once you rehab it. This will also allow you to rehab the property at your own pace assuming you buy it using a conventional loan. Once you are done rehabbing you can begin leasing out the property at max rents and put yourself in a better position. Make sure to do your research to see what is the max rents you can get for the property as well as what will it look like once you move out. Will you be negative or will you cashflow or break even? Its important to make sure you can break even or be very little in terms of being negative. Any amount that you are negative carries over and affect your overall Debt to income ratio. You want to make sure your debt to income ratio is available as possible to help you acquire your next house hack and you rinse and repeat until you no longer can use that strategy. 

@Albert Bui @Matthew Kwan

Hello Bob, 

You can get Helocs on your investment properties up to 75% CLTV. As long as you can meet the guidelines to get 75%CLTV and have enough equity then you can proceed. If you do qualify you would basically be refinancing your current Heloc and use the new Heloc to pay it off the original Heloc. Best to do Heloc when the property is being used as your primary so you can ge the max CLTV of 90% because once its considered an investment your max is 75%CLTV. Plan accordingly so you are set up appropriately.

@Albert Bui @Matthew Kwan

Hello Jace, 

We work with some lenders that can go up to 80% LTV for rate and term refi. It wont be cheap though. This will cost you about 1-2 points depending on your scenario. Your looking at a rate around high 8s to low 9s possibly. We would need to review your scenario more in depth to see what is the best option for an 80% rate and term using DSCR.

@Albert Bui @Matthew Kwan

Hello Archie, 

Even if you had a high income job DTI is always important because you should know where you stand at all times if you want to continue to use conventional financing for your future investments. You can always use DSCR financing where you use the properties rental income to qualify. DSCR loans do not look at your DTI only the rent to mortgage ratio. Lastly do keep in mind when calculating DTI the lenders do use taxes and insurance even if the property is paid off but if you have enough rental income to cover that monthly expense then you will eliminate that with that rental income. Its always good to plan ahead and review your scenario to make sure you are ready to execute your next deal when you come across one rather than just wing in it and find out you are stuck between a rock and a hard place.

@Albert Bui @Matthew Kwan