All Forum Posts by: Douglas Goldstein

Right now I have 30-year mortages with Chase and Bank of America, but as I look around for my next purchase I'm wondering about the online lenders that I see offered by lending websites and real estate websites that offer lower rates but just don't seem reputable.  I'm sure you've seen them.  Has anyone here gotten a mortgage from one of these companies?  What was your experience?

Over the past few days I've been working with Bank of America to get pre-approved for a mortgage for an investment property.  What they offered me is 5.75% with 20% down.  I've been reading posts from people talking about getting mortgages for less than 20% down on an investment property.  Is that possible or have I been reading the posts wrong.  Also, 5.75%?  Is that what everyone's working with at the moment?

So I'm looking to buy an sfr in Fresno as a rental investment.  I would enjoy the cash flow until I retire in 20 years and then most likely sell it to help fund my retirement years.  I have two options for the mortgage and wonder what conventional wisdom says is the best route to take.

Option 1: 15 yr fixed rate mortgage.  Cash flow $50/month not including property management.  When it's paid off in 15 years the cash flow is $1,200/month (if today's numbers never change, for the sake of argument).  Then sell it 5 years later.

Option 2: 30 yr fixed rate mortgage.  Cash flow $270/month not including property management.  Sell in 20 years - before it's paid off.

It seems like option 1 gives me more cash at the 20-year mark, but then I miss out on 15 years of cash flow.  Thoughts?

@Dan Heuschele

Here’s the history of the property if you’re curious:

It’s a stand-alone townhouse-style condo in Pasadena, CA, where rents are high and I’m confident it’ll appreciate in the future.

Bought it in 2012 as a short sale for $380k, $80k down.

Cash-out refinance in 2017. We used the money for down payment of the house we’re currently living in.

It now appraises at $800k. We owe $460k. If we take out 180k we’ll owe $640k.

Tenants currently pay $3,275/month which, after everything, is positive $150/month.

Pasadena is only getting more and more expensive, but it has risen in value so quickly that I worry about a correction or at least a long plateau.

I'm looking for ways to finance my next purchase. I'm could do a cash-out refinance on a rental I own since the LTV is 57%. Currently, it has $150/month cash flow. If I refinanced to an 80% LTV, I could get $180,000 to spend, but at that maximum level the cash flow would plummet to an $850/month loss. I wouldn't do THAT much, but how low would you let your cash flow go in order to unlock home equity for a new purchase?

to

Michele Wax

Specialist from Chicago

Looking to purchase multifamily, buy and hold as rentals.  no numbers yet, i'm asking about the plan itself.  I'd use hard money so i don't have to free up personal assets.

I'm determined to do a BRRRR but have some questions about the process:

1. In order to get the ARV just right, should I have it appraised by an appraiser who walks through with a contractor? So that they would, together, agree on what needs to be done to get it to a certain value?

2. For that matter, can you ask any appraiser to give a current value and the ARV? Or do appraisers not even do that?

3. How do you make an offer without being able to do that independent appraisal first?  Or is the offer a best guess, and if the appraisals don't match you walk away?

4. I intend to not use my own money for this, instead to get a loan from a hard money lender. And when all the rehab is done, get a conventional loan to pay the HML back. Is this a red flag? HMLs seem to charge hefty fees -- do those fees make that plan difficult?

Any thoughts for this here newbie would be appreciated!