All Forum Posts by: David VanWert

Firstly, I recommend using local lenders for both your primary and future investment properties. I've had several of my out of state investors use their own lenders that were out of state and they always seem to run into issues! (delayed closings, deals falling apart, etc)

You might have to have two separate lenders for what you are trying to do - one for the primary and another for the investment properties. Some lenders will give you excellent products on primaries and absolutely terrible terms on everything else.

My best advice is going to be to SHOP lenders. Talk to a bunch. Get their rates and terms and see what works best for you.

When it comes to your primary, you might be well suited to work with a mortgage broker that can shop around for you and get you the best deal. When it comes to your investment property, mortgage brokers are going to be no good. You have to go with a portfolio lender. They will give you by far a better product.

I'm closing a refinance on a rental tomorrow and I'll give you a quick run down of what I ran into over the past 2 months trying to get this done.

My two primary lenders that I've done many deals with over the past few years are not doing any new loans on investment properties for the time being. I was mid refinance with one of them and they emailed me saying that the bank decided they can't proceed with my loan due to a change in their risk policy - no more investment loans!

I spoke to every lender and mortgage broker in the area. I was running into a combination of ridiculously high rates, EXTREMELY high closing costs or a very low LTV. I finally found a lender that had very decent rates, low closing costs and a full 80% LTV. It's a newer local bank that is ambitious about expanding quickly.

It's a bit of a tricky situation right now with investment property financing but that's the great thing with the current times....if you can be creative and put in the work there are tons of opportunities.

Thanks @Luka Milicevic would love some intros to some of the better options in Nashville for primarys if you are open to that.

1 Vote

Quote from @Allan Smith:

You could start talking to lenders on what they expect. I know a few if you need one.

Would love some local recommendations!

0 Votes

Currently live in Los Angeles and gearing up to relocate to Nashville early next year. We will be selling our primary home here and purchasing a new home around Feb/March next year.

We should hopefully net $700-800K from our primary and are looking at homes in the $3.5-4M range in Nashville. Would like to hopefully purchase another investment property with the sales proceeds around the same time as the move. Question is, is there 10% Jumbo loans for that amount and use the remainder for the investment property, or maybe use an AIO loan , other options I'm not thinking of?

Looking to maximize the net proceeds and hopefully pick up our dream property and add a cash flowing property to the mix at the same time.

Would really appreciate feedback of the best way to achieve hopefully both homes and different strategies for primary loans in todays current climate. TIA!

0 Votes

Quote from @Shelby Pracht:

It will be really interesting to see what happens to condo prices in the next couple of years as interest rates rise and as a newer owners in the area get tired of trying to self-manage vacation rentals from afar for little to no cash flow. I wouldn't buy in Mammoth right now, but keep your eye out over the next couple years. I don't think the current market is sustainable long-term.

Agreed, just saw a property pop up yesterday that is identical to our unit, just he opposite end of the building, needs a big refresh and was listed @ $969,000 that is $300K more than our place that needed no work. Will be very interesting to see how things pan out in the next few years and people getting in over their heads when they want to self manage are make little to no profit.

0 Votes

Quote from @Nate Sanow:

The only con I see on a refi is that the rates could be higher by then. I’m sure you thought of that. Besides that it sounds like two great options.

Agreed, both are fine options but having a tough time picking between the two

0 Votes

Getting ready to lock in loan terms on a new large STR in the Smoky Mountains. Property is a new construction 10B/10ba property.Trying to play out two different scenarios to see what would be the best use of capital in the mid-term (roughly five years).

Option 1: 10% down, 4.375%, paying 2 points equaling $30K, P+I roughly $7525 + PMI of roughly 785 = $ 8310

Option 2 20% down, 3.875%, paying a quarter point equaling $3700, P+I roughly $6301

Option 1 would keep a significant amount more in our pockets (more than $125K) and get us very close to picking up another property and the difference in of 2K in cashflow would take nearly 7 years to balance out

Option 2 would be over $300K out of pocket but would potentially give us the option of a very quick cash out refi as there is already a significant amount of equity as we went under contract last July and obvious market conditions. If we cash out refi, that would also have fairly significant closing costs that would negate much of the initial 30K we paid in points on option 1.

I am seeing strong pros and cons for both scenarios and would love thoughts on what might be the optimal use of capital in this scenario. Thanks!

1 Vote

Originally posted by @Quyen Pham:

Hello,

It always a dream of mine to have a cabin in the mountain. I recently revisit this "bucket list", but the $ has to work (because well we are not independently wealthy and just let it "sit" lol). Any suggestions would recommend it would be so greatly appreciated. I wanted a 2bdrm because we have two sons 16/14 sons and I am hoping this will be somewhere we all could come together when kids get older and family of their own. I really like Mountainback condo? I reach out to a local realtor and he suggested Chamonix, but I am not so thrilled. I am currently working with realtor but he said the climate is really is for people who has $ and renting out is a bonus not a necessary. :(. I wanted somewhere that maybe at the minimum yield a little of positive cash flow for my efforts (I am planning to rent it myself), but most importantly will appreciate.

Any thoughts, insight by all would be so greatly appreciate. : )

I wouldn't count on much cash flow (if any) in Mammoth right now. Prices are quite high right now for investors. Case in point, you mentioned Chamonix, there is a 1b + loft for sale for $700k right now, that should gross somewhere in the neighborhood of 60-65k based on those numbers you would have a negative cash flow once you factor all expenses of PITI, TOT, hoa, and all other expenses. Have a good friend that owns in Mountainback and their pricing tends to be a fair amount higher than Chamonix

0 Votes

Originally posted by @George Paquette:

@David VanWert congrats on your place! We just closed one in Catalina Island. How was the process in Mammoth? Did you have to apply for the permit?

Yes have to apply for the tot but very easy process when we had to do it when we first went on the market in 2019

0 Votes

@Curtis Shapiro thanks, we have had the property since 2019 but never added it to BP haha

0 Votes

@Schneur Sanowicz sure, go for it

0 Votes

All Forum Posts by: David VanWert

David VanWert has started 24 posts and replied 99 times.

Post: Relocating from LA to Nashville, loan options for primary home?

Post: Relocating from LA to Nashville, loan options for primary home?

Post: Relocating from LA to Nashville, loan options for primary home?

Post: Mammoth Lakes - realistic cash on cash in first year?

Post: Best use of capital, 10% or 20% + co refi

Post: Best use of capital, 10% or 20% + co refi

Post: Mammoth Lakes - realistic cash on cash in first year?

Post: 3 Bedroom + Loft STR in ski town

Post: 3 Bedroom + Loft STR in ski town

Post: Help me analyze this deal!