All Forum Posts by: Chris Coleman

@Adam Wright have you tried any portfolio lenders? The rate will be higher. But it could get you into the property as long as it still cash flows healthy, and then you can potentially refinance after a year into a conventional loan if you desired and when your DTI is better.

@Jessica Singh here is where I recommend for learning more about turnkey providers and turnkey overall.

https://www.hipsterinvestments.com

Ali Boone is a wealth of knowledge and experience on the topic, and has videos and a Facebook group reviewing different turnkey providers.

@Greg John wow, there’s a good bit to unravel here.

But the short answer is, most likely not and pretty much just “no”. Banks are not known for giving mortgages to people who are unemployed, at least not since 2008.

So then you’re looking at getting a Private Lender, which would base the potential loan on the financials of the property, as well as potentially your ability to manage it and actually make the projected returns.

Therefore, you need to analyze and scrutinize the deal to make sure it’s a good deal, and then you could present it to a Private Lender.

You say the property has “rental income” of $2,000 per month. Is that gross rent or cash flow? If it’s gross rent, then what is the actual cash flow after all expenses?

Will the $73K cover the cosmetics you mention, or will you actually need more money to do those renovations?

If you have a deal where you can put up to 33% of the total with your own money, manage it conservatively, and it will generate 12% or more returns for the Lender, the you should have no problem getting Private debt.

But learn as much as you can about analyzing real estate deals and make sure the numbers really work.

Also, since it’s in a rural area, make sure you can keep good paying tenants in there.

Sounds like there could be plenty of unknowns here, so just be cautious and careful.

@Tyler Berardinelli just to be clear, you’re asking about townhomes, and not condos, correct?

If so, town homes are basically the same as a single family home, but just attached to others next to it. The owner owns the property in its entirety, including both the house and the small plot of land it's sitting on. There can be an HOA if it's in a neighborhood that has one, but it's not always the case. But detached single family homes can also be in neighborhoods with an HOA...

If the townhome is not going up in value, and especially if it’s going down, then it’s most likely the neighborhood and not the property itself. Thus, buy in a community where properties values are historically increasing.

Especially in the Mid Atlantic and Northeast like where you’re talking about, townhomes are very common, and can be good investments if the numbers work out good. I’ve owned several townhomes in the Washington DC area and done very well.

In my experience there’s nothing different about analyzing the deal on a townhome than what you do for a detached single family home. It’s the same.

Again, not talking about Condos here, because that can be a bit different.

@Jesse Gomez the first thing you should do, if you haven’t already, is determine how much income you need each month/year from your investments to allow you to leave the rat race.

Then begin to structure a plan that will get you generating that amount of income.

@Sam Stabler if your property will not appraise to meet the 75% LTV, and you don't want to pay the points or higher rate for 80% LTV, then it sounds like your only other option is the HELOC.

Just try to get one with a fixed rate and no pre-payment penalty.

Also be sure to understand when I/O payments end and the principal payments kick in, as that effects your cash flow.

And keep in mind that you'll still continue to pay down the principal on your original mortgage during this period. And if the time to start paying principal payments on the HELOC is far enough out, then maybe you'll be at 75% LTV by then and you could Refi again if it made sense.

@Ibrahim Yamini the refinance specifically should not hurt you in getting an investment property, as long as your overall amount of debt is not too high.

Lenders look at your Debt-to-Income Ratio (DTI) and your Credit score.

They are looking at your DTI to see if all your debt is too high for how much money you earn.

Regarding the mortgage on your home, it doesn't matter if it's a refinance, the original loan, a HELOC or whatever. You just don't want your DTI to be too high or else you'll have a tougher time getting a loan.

@Amanda Bennett it’s generally safer to invest in real estate in areas where there is good population growth and employment growth. This usually means metro or suburban areas.

@Erron Pham I've been investing with REI Nation (formerly Memphis Invest) for several years and can highly recommend them.

Also, look up Ali Boone of Hipster Investments here on BiggerPockets or Google. She helps investors connect with reputable Turnkey providers.

@Andre Medeiros look at the Rent Roll and T12 to know what the occupancy and rents actually are. And if the occupancy is low, then why is that? If rents are well below market, then why is that?