All Forum Posts by: Chris Mason

His income will determine in a big way how much he can pull out. 

He might not be able to get a 95% LTV mortgage on a $250k home... but could he get a $100k mortgage on social security income? Yup, that's very plausible.

Not a single mention of all the pre-covid 2019 commercial mortgages with 5 year maturities coming due this year that are on, for example, 25% vacant office buildings? 

"Cash out" refinances are quite well known, but please allow me to introduce you to the nefarious twin that pops up when you buy a building at 5% vacancy with max leverage, and then have to refinance it at 25% vacancy with an interest rate that's double the old one -- that twin is, of course, the "cash in" refinance. 

Hopefully that 25% vacancy didn't get in the way of anyone having another 10% to 20% down saved up to be able to complete the mandatory refinance...

The good rates and low fees come with fannie mae rules, so if you didn't pay cash and can't use delayed financing, the answer will be no. Or, if a bank does offer it, it'll have the same high fees you are looking to avoid. 

A good commercial mortgage will want to see a T-3 reflecting the stability, so call it 3 months if you want good terms. Shorter is out there, you will not like the terms/rates/fees/etc.

Any/all depreciation should be "added back," thus a non-issue. You say "lenders," plural, but if you've run your paperwork past more than one loan officer, I'm suspicious that not a single one were aware of adding back depreciation. Are you sure that when you say "lenders," plural, you don't actually mean 0 to 1 loan officer? 

DSCR loans are only for rental properties, no you shouldn't commit fraud.

Your $9k/mo, assuming no consumer debts, would qualify you for about a $3900/mo mortgage payment. I suspect that alone will not get you a house that suits your needs, so you might have to pair that with the $1m you are about to pull from the mobile home parks. The scenario might also be that you just say "f it," do a cash out on whatever commercial loan you next have coming due (since you have to do it anyways), and pay cash.

At the end of the day you would not be the first CRE guy that can't get a residential mortgage, and will not be the last.

Let me know if I can help, I do business nationwide on the commercial mortgage side of things. I'm likely not licensed where you want to buy the home, but if in the process of doing that cash out refinance I put my residential hat on and can figure it out, maybe there's a world where I find/educate the residential MLO to help you with that, idk. 

 The entire state of California only has like 30 listings at a given time, out of 54 counties. Which is a manageable number. And it shows them on the map of the state. So I usually click on my state and browse from there. 

When only about half of the counties have even a single listing, it's not useful to try searching by city. I don't think I've even tried tbh.

www.hudhomestore.gov

ALL other websites are a scam of some variety. 

"But but but Chris, 123 Banana St is listed on the scam website, but not on hudhomestore.gov" - yeah, because it sold 9 months ago, but the scam website isn't interested in showing you accurate information, it's a scam website. 

I made a tiktok video about this intended for owner occupants. The only difference for an investor is, obviously, the $100 down option goes away.

Note that like 1 week after I made the below video, they redesigned the website. But if you're on www.hudhomestore.GOV (emphasis .gov, not .com or .net or anything else) then you're at the right place. 

Second emphasis on where I discuss in the video that you have to have a hud-approved buyer's agent to place bids. Nope, you can't call the listing agent, nope you can't work something out, nope there's not a workaround. 

It's not like you have to have a special savings account titled "mortgage purposes reserves" that you can't use for anything else.

The same thing you call your "BRRRR oh crap renovation cost overrun fund," which needs to be sizeable anyways, your LO can call your reserves. You have a solid retirement account (see above about "you should have this anyways")? Your LO can also call that reserves.

After 7 properties the reserve requirements can get silly, but cross that bridge when you get to it. 

One thing about Sac: it has a normal "seasonal" market. So it slows down in the winter. That seems obvious, but I've had more than one investor from the Bay Area or SoCal have a heart attack when they saw that values had dipped in December or Feb (as opposed to "real estate always goes up, it's just a matter of by how much!" that a "big city Californian" might think of as "normal"). 

Again, sounds like an obvious statement, but not necessarily so obvious to someone from San Diego, based on the track record of heart attacks mentioned previously. :)

Assuming you can time it: Winter or early spring is the ideal "buy season."

And fall is "cash out refi" season. The summer comps will be captured by the appraisal, but the fall/winter sales haven't closed yet (appraisers give very little weight to "in escrow" comps, they like "closed" comps), so it's a good time to have a property appraised for a cash out refi, which of course leads right into having a down payment for the winter buy season.

 You tell them that if they don't want to do their jobs to properly market the unit, which may or may not include hosting open houses, you care more about the results than the progress, then you may have to re-evaluate the relationship you have with them.