All Forum Posts by: Dmitri L.

Curious if anyone has any experience closing a primary residence with a bridge loan or any other "cash-equivalent" product, then refi'ing to FHA/conventional later?

I'm looking at an estate sale for a property that would eventually be my primary residence, but which has a current tenant in place that wants to stay for another year or so. Was thinking to close with a bridge loan and then refi to FHA/conventional once we are ready to move in.

PROS: Am not in a hurry to move since we still have a year on our current lease. Being flexible could help beat out the competition in this crazy north NJ market at the moment (still seeing 5-10+ offers on each listing, 10-20% over asking is a minimum to play, it seems). Could maybe even bake in some rehab $ in the bridge loan to do some work before refi'ing?

CONS: Unknown rate/ability to refi in a year cos you never know what will happen in the world?

Would love to hear any thoughts/advice.

If anyone has any leads for good lenders that offer something like this in New Jersey, would really appreciate it!

Thanks as always!

Dmitri

0 Votes

Thanks everyone for the advice. Just wanted to share that I did manage to do the refi, was actually fairly smooth once I found a good lender to work with :)

Major thanks to @Jay Hurst and his team. They were excellent to work with. Highly recommended!

1 Vote

Quote from @Alan Asriants:

Those markets have definitely seen some growth in that past years as more people moved out of the city and were looking for alternatives cheaper than the outskirts of Philly. I think you will find decent schools there, steady tenants, and appreciation long term. Each areas has its ups and downs so I recommend driving around to see what part of that market you are interested in. I believe there is a good amount of newer townhomes and such being built there.

Thank you for the feedback! Yep definitely a lot of leg work needed, but it's good to know I'm not on an obviously-wrong track.

Looks like a few members on here are active in the area and there are some BP/REI meetups, too.

1 Vote

Philadelphia, Pennsylvania

Quote from @Alan Asriants:

Completely agree with you about the Philly/PA market. COVID created a donut effect. Downtown prices have barely shifted and maybe even dipped during 2020-2023 while the suburbs, NE philly, roxborough have skyrocketed and are still climbing.

Do you happen to have any insight into the north east PA market? Allentown and surroundings? Seems the population has been growing consistently over the last decade, and I like what I've seen so far from a few brief visits.

Interesting point about the donut effect, thanks!

1 Vote

Philadelphia, Pennsylvania

Quote from @Alex Bekeza:

There are always exceptions in this world which I'm sure someone will chime in with but realistically, for DSCR, 75% for cash out.

Cool, that sounds reasonable. How about for a new purchase/BRRR?

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Quote from @Stephen Rinaldi:

I own a mortgage broker shop, Rinaldi Group LLC. We are big in PA, but also do substantial business in DE, NJ and have started gaining traction in MD and FL. Its amazing to be the wide range of markets I see, for example in the suburbs of PA you will need to name your first born child after the seller to get an agreement of sale, also in most parts of DE, but in some part of Philly and NJ houses are sitting making the market more buyer friendly. Im just curious about where other people live and work to see if there has been a drastic change over the last 6-12 months or if rates being higher has changed anything in terms buyers leverage.

Please comment the area you are speak on and what type of market you seeing

Thanks you in advance!!

Hi Stephen!

I live in north NJ and have property in DFW TX. Both markets are way overpriced for new rentals.

I hear there's a lot of industrial/logistics type of development happening along the 222/78/81/83 corridor in PA. Would you agree with that statement? Good macro trends going forward?

Trying to learn more about the PA market and see if I can focus on that for future rentals ;)

Dmitri

0 Votes

Philadelphia, Pennsylvania

Quote from @Alex Bekeza:

@Jay Hurst Thanks man. I should have worded it the way you did because I believe we were referencing the same exact restrictions. I agree that the words Fannie/Freddie/Dodd-Frank were pointless/incorrect though and could have settled for "primary residence". Solid Fact Check.

Thanks for the input though, I think I'll probably need to look into DSCR loans at some point.

What's the max ratio are you/your industry peers typically lending to?

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Quote from @Jay Hurst:

Quote from @Dmitri L.:

Hi All,

I have a TX rental (~250k market value, ~80k loan balance) and want to pull some cash out of the equity via a cash-out refi/heloc/2nd mortgage.

Unfortunately it looks like there's some rule against the combination of:

- conventional loan

- cash-out refi

- investment property

- borrower does not own a primary residence in TX

Has anyone ran into this type of issue before? Anyone aware of a lender that could help?

TIA!

Dmitri

@Dmitri L. There are NO state specific rules regarding taking cash out on a investment property in Texas. We do a lot of them. The reason for the confusion is there ARE state specific rules about taking cash out of an owner occupied property. So, non-Texas based lenders simply do not understand the rules well enough so they just do not do them as it just not a big enough piece of their overall business to take the risk. So, the attorneys just say they will not do them and the LO's assume it is some sort of law. I have heard all kinds of crazy things on why they can not be done, but they are all made up. You can take cash out of a non-owner occupied cash out in Texas. We do it all the time.

Thanks Jay (and everyone else) for the helpful feedback!

The lender specifically referenced this:

"It’s called the Texas section 50(a)(6) and it involves cash out transactions in TX."

Though as she was reading it over the phone, it didn't sound like it said what she said it did.

Jay will email you shortly, perhaps we can work together on it. TIA!

0 Votes

Hi All,

I have a TX rental (~250k market value, ~80k loan balance) and want to pull some cash out of the equity via a cash-out refi/heloc/2nd mortgage.

Unfortunately it looks like there's some rule against the combination of:

- conventional loan

- cash-out refi

- investment property

- borrower does not own a primary residence in TX

Has anyone ran into this type of issue before? Anyone aware of a lender that could help?

TIA!

Dmitri

0 Votes

Please comment below if you'd like to hear Garyvee on the BP podcast!

Author of "Crush It", marketer, and entrepreneur - his advice would completely transform anyone'a real estate business if you actually put in the work.

https://m.youtube.com/watch?list=PLfA33-E9P7FA-A72...

@Joshua Dorkin

@Brandon Turner

Josh and Brandon - pretty please ;)

0 Votes

All Forum Posts by: Dmitri L.

Dmitri L. has started 16 posts and replied 306 times.

Post: Bridge Loan => Conventional / NJ contacts

Post: Cash-out refi issues in TX

Post: Im interested in other people's market and how they have change

Post: Im interested in other people's market and how they have change

Post: Cash-out refi issues in TX

Post: Im interested in other people's market and how they have change

Post: Cash-out refi issues in TX

Post: Cash-out refi issues in TX

Post: Cash-out refi issues in TX

Post: Bring Garyvee on the bigger pockets podcast!