All Forum Posts by: David Dye

@Scott Groves

While I agree with you on most of what you said, especially the part about being involved, I hate to disagree greatly about the interest rate. 

Many individuals focus too much on the interest rate. Many times, taking a higher interest rate is beneficial because it will cover all closing costs. If you are not going to keep the loan for the entire term, why would you want to pay up all the fees when the difference in payment will not add up to the amount of fees you paid for the rate. On the other hand, if you are going to keep the loan the entire term (which few do), then the lower rate may be worth the cost up front. 

Another thing that has to be considered is mortgage insurance. In some cases, say you are using an FHA loan to buy a property, we as loan officers will see if we can get you into a conventional loan at a higher rate with a lender that allows no monthly mortgage insurance. Even with the higher rate, your payment can be lower (this is not all the time, it is just an avenue a good LO will look into).

-David

Hey @Mario F.

The only thing to consider with the rental of the other room is that you cannot use the rental income to qualify for a loan. The property has to be listed on title as multiple units to use the income. 

-David

@Mario F.

Loopnet is generally for commercial properties. You can find duplexes in all the same places you would find single family homes. However, some of the listings on the big name sites have already been sold. The best way to get up to date info on properties is to find a good agent. 

When I look for properties, I generally send my agent a list from some of the big name sites. Without fail, there are always a handful that are not actually on the market. 

-David

Colby Hawkins What kind of properties are they? Where are they located? Year built? -David

Mario Furmanczyk I would definitely secure a place to live for yourself first... If you have enough income, you could maybe look into a duplex and still get the benefits of a low down mortgage. You would have them to help pay down the note. Keep in mind... When figuring a return on your money, primary residence interest rates are much cheaper than non owner occupied rates. Hope this helps! David

Rudy Jimenez Welcome to BP! Would love to be part of your network. I buy and hold invest down in the LA area and am a lender by day. Would be happy to answer any financing questions you may have. Cheers! David

Alex J. I have been treated very well by the AV area in terms of rentals. Would love to connect with you! If you can find the right deal, and there are plenty out there, you will not have any trouble finding a renter. The nice part is that the rental market out there is so strong that you can be selective. With my first property out there, I had eleven applications within a week. This gave me the ability to be very picky. Cheers! David

Hey Lukas Koube ! I too am from the LA area. Do not be afraid to venture outside the city to find deals. I went a little north and am making a very nice return with 20% down for a newer property. Hopes this helps! David

Erin Monday As a lender, I'm with Bob Bowling Money is so cheap now that you are much better holding that cash and re investing it in more property or something else with a higher return than your interest rate on the property. In real estate, leverage is everything. Use the banks money to make you more money! Hope this helps! David

@Dustin D.

NO DEAL! 

This is a cash flow negative property that could require a balloon after five years. I would run... I would never go cash flow negative, risk is too high... You are betting on appreciation and equity payments (which aren't even being made fully by the tenants).  Not sure what the market is like in your area but I would not bet on appreciation at this point in our real estate cycle...

If he decides to call the balloon payment, you will be forced to find emergency financing or lose the property and everything you put into it. 

Hope this helps!

-David