All Forum Posts by: Carlos Valencia

Are you currently living in the single family? 

Assuming your not living there. You could use the leases even if by the room. Keep in mind for investment property cash out refi the max is 75% loan to value. Hopefully you have enough equity to make sure the juice is worth the squeeze. 

If you live there then you cannot use boarder income unless they are another legal unit like a duplex for example. Then you can use the other units rents as additional income but not to offset your current mortgage. Only 75% of the rental income can be used. 

But if you do live there at least you can go up to 95-97% LTV. Depending on the scenario.

@Albert Bui @Matthew Kwan

Hello Angelo, 

First step is to talk to a lender and get pre approved to see what your maximum pre approval is. At that point you can decide if you want to max out on your first property or be conservative and just borrow what you feel comfortable based on the payment. Then once you have your golden ticket (pre approval letter) from the lender then you can begin looking for homes with a realtor and go shopping. Here is a quick tip lenders usually lend you up to half your income. If your targeting a payment of $2300 that means that you need to make at least $4,600 per month gross or $55,200 annual gross. This is assuming you have no other monthly debt. Hope this helps in regards on where to start. 

@Albert Bui @Matthew Kwan

Hello Erin, 

There are some lenders that allow you to use DSCR for first time home buyers but as investment property. The lenders that offer DSCR to first time home buyers will be a bit more expensive and require a higher down payment approximately 40%-30% down payment. If your self employed have you looked into bank statement loan programs? You may qualify by using bank statement program as that program uses all your business deposits to calculate your income. If you have huge deposits from your business this can be a solution for you.

@Albert Bui @Matthew Kwan

Hi Delaney, 

Yes we all want time freedom lol but unfortunately it wont happen over night. The key is to be patient when investing in real estate. Look at all your options and research what type of real estate investing is the best option for you. Many people tend to start with house hacking where you buy a single family property or 1-4 unit property and live in one unit and rent out the other units or rooms if buying a single family home. The benefits of starting your journey with house hacking is that you don't need much money down as you can start with as little as 3.5% -5% down. The goal with this strategy is to have low living expenses as your tenants are helping you pay down your mortgage. Once you move out the hope is that the unit you are leaving will rent for enough money that you will come out positive or break even. Then once you move out you rinse and repeat and acquire your next property. Until you build your real estate portfolio up to what you feel is enough cashflow to live off from your rentals. The goal is to make sure you have high income, good credit score and enough assests and reserves to keep moving towards the next deal and dont max out on your first deal meaning do not max out your debt to income ratio as it can affect your borrowing power to acquire the next one. To get your time back you have to run the numbers as see how much cashflow you will need in order to be able to live comfortable from just your rental cashflow. You may only need 5 properties or 20 properties depending on your lifestyle. Advise is to get in contact with a lender that has experience in structuring these mortgages where you can move on to the next one and plan ahead. Reminder this whole real estate investing is a marathon and not a race. Be patient and before you know it you will reach your goals. 

@Albert Bui @Matthew Kwan

Not enough properties that make sense or pencil out. Rates are a factor as well as income and assets. Unless your making 200k + per year then you have a great chance in investing and maybe start with a househack to live with little to no monthly housing expense. Those are some of the challenges we have seen in this market. 

@Albert Bui @Matthew Kwan

Hi Lara, 

Its always a great time to buy. There's nothing like the present. When it comes to fix and flips the uglier the house the better. The key is to make sure you purchase your the home at the lowest cost and know what your after repair value will be to see if you will actually be able to make a nice margin after netting all cost. Make sure you underwrite your deal to what makes business sense to you. Also have your team ready in regards to whos going to rehab the property. Make sure to move fast as well because on these projects time is of the essence because the longer you hold the property the more money you lose every month. Lastly expect to pay 2-3 points in cost for a hard money loan and rates to be 12-14% for first time investor. Good luck on your first project. 

@Albert Bui @Matthew Kwan

Hi Margarita, 

is this your first purchase? if it is its normal to have mental blocks or experience paralysis analysis. If your purchasing your first investment. First thing is you need to remind yourself on what your goals are for this property. Are you trying to flip it, house hack it, mid term rent, long term rent. Adding value to the property to be able to rent it out for as much as possible. Make sure your due your research and create yourself a check list that makes sense to you so when your out there making offers you can take that property through your checklist and see if that property meets your needs for what you are trying to accomplish. Current market especially in Los Angeles is very challenging to find a positive cash flowing property. Might be like finding a needle in a haystack. In Los angeles at least you know you will have appreciation if your going to hold for long term but don't expect much cashflow. You will be lucky to break even on paper. Good luck on your search hope this helps get you out of that mental block.

@Albert Bui @Matthew Kwan

Hi Martin, 

Have you tried attending local real estate meetups in your area? Those are very helpful to get a chance to talk to experience investors and pick their brain about their deals. Investing in Real Estate can get overwhelming really fast as there's so many avenues to go about it. I wouldn't say that there's one strategy better than others because at the end of the day everyone's goal is different. What might work for one person my not work for you. I would look into what it takes to do short term rentals as an investment, house hack, flipping, long term etc... They all have their pros and cons and just remember that this is a marathon and not a sprint. Do not expect your first deal to cashflow immensely but analyze the long term projection. Ask yourself based on your personality which investment will match better with you as each strategy is different. Hope this helps to try to figure out what options you would choose to proceed. 

@Albert Bui @Matthew Kwant

Hi Chelsae, 

Congrats on your ealry journey to real estate investing. House Hacking is one of the best ways to begin growing your real estate portfolio. Make sure you do not max out on your first deal regarding your Debt to Income Ratio otherwise it will make it challenging to move on to the next one. We have many of our clients start with House Hacking including ourselves and no better way to learn about rehabbing a property on how to add value to get the max rents out of your property. If you have any questions about House Hacking please don't be afraid to reach out we are happy to answer any questions. 

@Albert Bui @Matthew Kwan

Hi Kaleb, 

Have you been attending local real estate meetups in your area? Thats also a great place to meet investors and create new partnerships and friendships. If you have not yet I would suggest to use eventbrite or meetup.com to look event in your area. I live in OC and theres plenty out here and LA area too. I've attended many in my area and have met and created connections with some awesome people. 

@Albert Bui @Matthew Kwan