All Forum Posts by: Dennis Muno

 Hello Kefah,

So generally HELOCs on investment properties are hard to find especially with current rates because most lenders consider them risky. In lieu, you may want to look up home equity loans(depends on OH state laws and lenders) to see if they'd help you or another option may be a DSCR cashout refinance. Some lender may do a second position loan if the equity justifies it but you'll have to search

 For private money, you will usually need 20% down to start. Since it's private money, your rate may be a little higher than other loans. You'll also need to meet the private money lender's qualifications to be able to get private money funding. Each private money lender will be different

 Hello Giora,

Please do you know why the rents are below market value? Has the seller indicated if and how much after costs the cashflow is? Are the rents below market value because the properties need rehab?

Commercial/private money may be possible options

 Hello Justin,

So mixed use complicates things as many lenders especially with the current interest rates will want to greatly reduce risk. Some lenders may lend for a line of credit  but you'll have to search for them. Commercial lenders will be the people to speak to for a line of credit on a mixed use property. Does the property cashflow after expenses? May not be impossible but you'll have to search for them. Your FICO, equity in the property, location in RI(whether rural location or not) will be a factor

 Hello Armando,

Well once you get the HELOC opened on your first property, keep in mind that will increase your debt to income, which may affect your ability to buy a home. A rising DTI means a lower or decreased credit score. However, if you make your payments on time on the HELOC, good!

Does not mean you can't get another primary but it might. While it is rare, there are some some lenders who will go into the 500s for FHAs. You just have to find them. For conventional loans your DTI can't be an inch above 50%. I believe for FHA loans, some lenders will do up to 55% DTI with a manual underwrite.

So credit wouldn't be your biggest concern but debt to income. However, if your DTI isn't insanely high you should be able to buy another home, provided you qualify.

Ask your lender for #2 to go through the guidelines for the loan programs to justify why he says you can't buy a home #2 less than 1 year after getting the HELOC.

 Interesting to know PA also has that law. In OH I believe prepayment penalties for DSCRs are not allowed or severely limited. I will need to check.

You can still get many lenders who will lend to you for a DSCR in PA- just without a prepayment penalty.

Keep in mind: DSCR loan pricing depends on your DSCR ratio, # of months of PITI reserves, your FICO and things like the duration of the prepayment penalty(usually 3 years or more prepayment penalty, the better your pricing). So, if in PA prepayment penalties aren't allowed, you'll get DSCR pricing with no prepayment penalty, which will make your loan pricing options a little higher than if you wanted some prepayment penalty(for better pricing) and it was allowed.

So, with no PPP, your DSCR pricing options will be higher. You just have to make sure that if you have a DCSR loan pricing option you get, your rent al income can cover the PITIA every month

 Hello Daniella,

So I just read your post. Congrats on your refi. When you say a fix and flip on another home, I am guessing you mean you want to buy another primary residence and rehab it?

If you want to buy and rehab a primary home, an FHA 203K is an option to purchase and the home and get money to rehab the property too. The FHA203K will be more lenient than the conventional option. If you already have an FHA(can't have more than one FHA unless special circumstances) you can do a conventional Homestyle renovation loan. This helps you buy a home and get financing for the rehab too.

When you say new construction, do you mean new construction for a primary residence or new construction for an investment property? It sounds like new construction for a primary residence.

If new construction for a primary residence: With your 122K after paying off your 13% HELOC, yes 122K may not be able to buy you a home but it will be plenty enough for downpayment and closing costs for a new construction build as well as for another investment property if you choose to.

 Hello Chris,

If you are looking to do a house hack, I think an FHA loan would be the best way to go. You can put down as low as 3.5% for FHA loans. FHA loans are also pricing better now too.

Regarding your gf's 6 months income from last year, since you are both looking to buy together, how long have you been employed? Keep in mind if you both apply, both your financials will be considered-FICO, joint income, debts, etc. 

Have you been in the same job more than 2 years? Has she been in the same job since? I am guessing by now she has been employed in the same job for a year? Lenders like to see some stability. If yes, maybe maybe maybe, some lenders maybe willing to assist especially if you have been in your job greater than 2 years. 

If you have been in the same job more than 2 years and by now she has been in the same job more than a year with no job change some lenders may be willing/able to help. It'd depend on them and FHA guidelines. I'd ask lenders if it'd be a deal breaker.

 Hello Agnel,

Yes there are some DSCR refinance interest only loans where you pay only the interest per month. However, what type of interest only loan would vary from lender to lender that offers that type of loan. I would advise that if you go interest only, that you ask questions about what the type of interest only loan would be (duration, will rates become adjustable after a couple of years, etc). That should help you make an informed choice

 Hello Dustin,

Options for doing this are commercial. Other options may also be private money(it depends on the private money lender). Private money may be a little more flexible with some terms but so far these are the options.

Keep in mind, lenders you ask will probably want to see the rent rolls as well as know the taxes and insurance to see if they will lend.

Private money/ commercial options are a way you'd proceed with this. Since the purchase contains multiple types of properties, conventional or traditional financing will not be applicable