All Forum Posts by: Dwayne Ramsey

Hi Albert Abeyan,

You’ve done a great job outlining the potential options for your situation. Here are some additional insights based on the information you given:

1. Mobile Home: Mobile homes generally have lower upfront costs compared to traditional site-built homes, making them more affordable for some buyers. However, their value tends to depreciate over time, similar to most vehicles.

2. Regular House: Conventional bank loans require a credit score of 620 or above and interest rates are generally higher for these loans. The loans are riskier for lenders because borrowers are considered more likely to default on an investment property if they run into financial trouble than on their primary home.

3. Apartment/Condo: Condos can be a great investment for those looking to capitalize on today’s market. However, whether or not condos are worth the investment depends on one’s own intentions.

4. Property with a Detached Unit or Extra Guest Suite: Detached single-family homes are the most common type of residential investment property. However, owning a home with rental units might earn income you can use to help pay your mortgage or other expenses.

5. Duplex/Triplex/4-Plex: For FHA loans, at least one of the units in the duplex must be your primary residence. The maximum debt to income ratio will be 56.9%. At least 51% of the square footage within the building must be residential.

6. Renting an Apartment: Renting a property doesn’t come with all the responsibilities associated with homeownership and you have more flexibility, as you aren’t necessarily tied down to your property.

Another option could be a Lease with Option to Buy. This would allow your family member to move in right away with the option to purchase the home at a later date. The terms of these agreements can vary widely, so it’s important to fully understand the contract before proceeding.

Remember that each option has its own set of pros and cons, and what works best will depend on your specific circumstances and financial situation.

It’s always a good idea to consult with a real estate professional or financial advisor before making such decisions.

Good luck with your property search! I hope you find the perfect solution for both your investment goals and your family’s needs.

Hi Amanda Peterson,

It sounds like you’re considering a seller financing deal, which can be a great strategy for real estate transactions. Here’s how you might structure the deal:

1. Sale Price: Offer the sale price they would sell on the MLS. This ensures they get the full value of their home.

2. Down Payment: Offer to pay the down payment they need for their mobile home. You mentioned you might need a private money lender or a loan to pay this.

3. Monthly Payments: Structure the monthly payments over a certain number of years (X years) that would provide the best cash flow for you. The payments should be affordable for you while also providing a steady income stream for your in-laws.

To convince them (your in laws) it’s a good deal, you could highlight the following benefits of seller financing:

1. Avoid Capital Gains Tax: If they sell the home and move out of state, they might have to pay significant capital gains tax. With seller financing, they can spread out the income over several years, potentially reducing their annual tax liability.

2. Steady Income Stream: Seller financing would provide them with a steady income stream over the agreed-upon term of the loan.

3. Interest Income: They would earn interest on the loan, which could potentially add up to more than what they would get from a one-time sale.

4. Faster Sale: Seller financing deals can often close faster than traditional mortgage deals.

5. No Landlord Responsibilities: They wouldn’t have to worry about landlord responsibilities, as you would be taking on those duties.

Remember, it’s important to consult with a real estate attorney or professional before entering into any real estate agreement to ensure all parties’ interests are protected and all legal requirements are met.

I hope this helps! Let me know if you have any other questions.

Hi Archie Minkowski,

It sounds like you’re considering a few different strategies for your real estate investment, which is great. Let’s address your questions one by one:

1. Should you counter-offer and require a balloon payment after 12 - 24 months?

A balloon payment is a larger-than-usual one-time payment at the end of the loan term1. If you have a mortgage with a balloon payment, your payments may be lower in the years before the balloon payment comes due, but you could owe a big amount at the end of the loan.

Including a balloon payment provides the motivation in addition to the time a buyer may need to qualify for bank refinancing. Including a balloon payment to shorten the term to 5, 7 or 10 years can provide flexibility and peace of mind to the seller.

Therefore, requiring a balloon payment could be a good strategy depending on your financial goals and the buyer’s ability to make that payment.

2. Is there a way for you as the bank to refinance the note and pay off Chuck, then continue collecting mortgage payments? Can DSCR loans be used for owner financing or rentals only?

Refinancing an owner-financed home is possible. The requirements are fairly basic: The land contract must be recorded properly, cash out is typically not allowed, documentation must prove 12 months of on-time payments, and the applicant must meet traditional credit and income guidelines.

As for DSCR (Debt-Service Coverage Ratio) loans, they are designed for real estate investors and allow investors to secure financing for their investment properties based on the property's ability to generate sufficient income to cover the mortgage payments and other debt obligations.

DSCR loans provide long-term financing for a rental (buy-and-hold) investment strategy. So yes, DSCR loans can be used in owner financing situations as well as for rentals.

Please note that while this information can provide a general understanding of these strategies, every real estate deal is unique and it’s important to carefully analyze all factors such as potential rental income, financing costs, and your personal financial situation.

It’s also recommended to consult with a real estate professional or financial advisor before making any decisions.

I hope this information helps! Let me know if you have any other questions.

Hi Deaven Reed,

It sounds like you’re considering a strategy often referred to as a “live-in flip” where you live in the property while renovating it, and then either rent it out or sell it. This approach can be a viable way to get into real estate investing, especially when starting with limited funds.

Using private or hard money for the purchase and renovations, then refinancing into a traditional mortgage (often referred to as the BRRRR method - Buy, Rehab, Rent, Refinance, Repeat) is a common strategy used by many real estate investors.

When living in the property during the renovation process, one of the main advantages is that you can use owner-occupied financing. This means you can get a traditional mortgage with a down payment as low as 3% or even 0% if you qualify for specialty loans. In contrast, investment property loans typically require at least a 20% down payment.

As for your question about refinancing with just 3.5-5% down or taking out the mortgage with 80% LTV, it really depends on your financial situation and goals. If you plan to rent out the property after living there for a year, it might make sense to refinance with a lower down payment and take money out of the deal. This could provide you with cash to invest in your next property. However, if your goal is to maximize cash flow from rental income, leaving more equity in the property (i.e., refinancing at 80% LTV) could result in lower mortgage payments and therefore higher net rental income.

Please note that while this information can provide a general understanding of this strategy, every real estate deal is unique and it’s important to carefully analyze the numbers and consider all factors such as renovation costs, potential rental income, financing costs, and your personal financial situation. It’s also recommended to consult with a real estate professional or financial advisor before making any decisions.

I hope this information helps! Let me know if you have any other questions.

If you are interested in purchasing a property in Montgomery County, AL - Here's the maximum FHA cap (Federal Housing Administration Cap) loan amount you could receive for each of these types of residential properties:

Single-family Cap - $472,030.00.

Duplex Cap - $604,400.00.

Triplex Cap - $730,525.00.

Fourplex Cap - $907,900.00.

I've uploaded a screenshot from the website of the private lending company I work with showing this. It's at the bottom of this message.

Anytime you want to know the FHA loan cap for your market, just let me know and I'll look it up and send it to you.

As a private money lender, I work with a reputable private money lending company that offers creative financing solutions for fix and flip real estate investors through private money loans.

The company also does private hard money lending for wholesale, rehab, or buy-and-hold for long-term cash investment deals.

We make private loans to real estate investors who are interested in any of the following three types of real estate transactions:

1. Repair and Flip.

2. Repair & Keep.

3. Refinance and Reboot.

Type Of Properties Funded: Residential - Single-family, Duplex, Triplex, and Fourplex.

I am committed to providing you with the best service possible, with competitive rates and flexible terms. I want to make you a very happy and satisfied client! Contact me today to learn more about how we can assist you in achieving your objectives.

For more information, contact me at: (912) 638-6845 (Office Phone) or (912) 266-9489. (Mobile Phone) Email: [email protected].

You may also complete the information form at: https://privatemoneyforus.com and I’ll get back to you promptly.

Please give us a try today! You won't regret it!

WHAT IS PRIVATE MONEY?

While traditional loans depend on the borrower’s credit score, employment status, debt to income ratio etc., private money offers other creative ways of qualification. The majority of the time, private money loans are secured by the property that is being acquired or by another asset.

Although private money lenders work by connecting a private investor with a borrower, these loans are still required to follow banking laws. These kinds of loans are great for business capital and are not recommended for private consumer debt purposes.

BENEFITS OF USING PRIVATE MONEY.

When you find yourself in a need of funding for a business venture or an investment especially in real estate, a loan like this will be just what you need. Here are some benefits of private real estate loans vs. a traditional mortgage loans.

*Fast Funding – If everything goes according to plan, a private money loan can take a few days to get funded as opposed to a traditional loan, which can take weeks or even months.

*Flexible Terms – Working with your loan officer on the terms that work for you allows more flexibility to design the loan that serves your situation best.

*Less Paperwork – Because the loan will secured by an asset rather than the borrower, less paper work and documentation is needed to process the loan.

*Get Better Deals – Being able to bring fast cash to the table allows for better negotiations and better deals.

*Borrow More Money – Private money lenders can lend up to 100% of the purchase price with no money from your pocket.

*Easy Loans For Fix & Flip – Unlike traditional mortgage loans, private mortgage lenders love funding Fix & Flip investments.

HOW TO QUALIFY FOR A PRIVATE MONEY LOAN?

The most important thing that must be done initially is discovering and securing the property you want to invest in. Once you start the funding procedure, it will probably go fast, and the loan will be secured by the property in question. Without the property being under contract, the lender will not want to invest time in working with you without a specific property to work with.

With that said, here are the steps to give you the best chance at qualifying for a private money loan.

*Write offers and secure a property

*Make sure your offer is within range

*Property has to be a 1 to 4 unit residential property, under 2800 sqft and on a 1/2 acre maximum. (See screenshot below)

If you need to know the FHA loan cap for your market, just let me know and I'll look it up and send it to you.

As a private money lender, I work with a reputable private money lending company that offers creative financing solutions for fix and flip real estate investors through private money loans.

The company also does private hard money lending for wholesale, rehab, or buy-and-hold for long-term cash investment deals.

We make private loans to real estate investors who are interested in any of the following three types of real estate transactions:

1. Repair and Flip.

2. Repair & Keep.

3. Refinance and Reboot.

Type Of Properties Funded: Residential - Single-family, Duplex, Triplex, and Fourplex.

For more information, contact me at: (912) 638-6845 (Office Phone) or (912) 266-9489. (Mobile Phone) Email: [email protected].

You may also complete the information form at: https://privatemoneyforus.com and I’ll get back to you promptly.

Please give us a try today! You won't regret it!

If you are interested in purchasing a property in Montgomery County, AL - Here's the maximum FHA cap (Federal Housing Administration Cap) loan amount you could receive for each of these types of residential properties:

Single-family Cap - $472,030.00.

Duplex Cap - $604,400.00.

Triplex Cap - $730,525.00.

Fourplex Cap - $907,900.00.

I've uploaded a screenshot from the website of the private lending company I work with showing this. It's at the bottom of this message.

Anytime you want to know the FHA loan cap for your market, just let me know and I'll look it up and send it to you.

As a private money lender, I work with a reputable private money lending company that offers creative financing solutions for fix and flip real estate investors through private money loans.

The company also does private hard money lending for wholesale, rehab, or buy-and-hold for long-term cash investment deals.

We make private loans to real estate investors who are interested in any of the following three types of real estate transactions:

1. Repair and Flip.

2. Repair & Keep.

3. Refinance and Reboot.

Type Of Properties Funded: Residential - Single-family, Duplex, Triplex, and Fourplex.

I am committed to providing you with the best service possible, with competitive rates and flexible terms. I want to make you a very happy and satisfied client! Contact me today to learn more about how we can assist you in achieving your objectives.

For more information, contact me at: (912) 638-6845 (Office Phone) or (912) 266-9489. (Mobile Phone) Email: [email protected].

You may also complete the information form at: https://privatemoneyforus.com and I’ll get back to you promptly.

Please give us a try today! You won't regret it!

You're welcome! Nitin Gove.

Hi Nitin Gove,

Here are some ways to safeguard your new out-of-state rental property:

1. Monitor the local real estate market: Stay updated with the local real estate trends and prices.

2. Create a go-to list of trusted service people: Having a list of reliable local service providers can be very helpful.

3. Purchase a home warranty: This can cover the cost of repairing or replacing major home systems and appliances.

4. Automate rent collection and maintenance requests: Use online platforms for rent collection and to manage repair requests.

5. Perform routine inspections: Regular inspections can help identify potential issues early.

6. Network with the neighbors: Good relationships with neighbors can be beneficial for out-of-state landlords.

7. Stay organized: Keep all documents and communications well-organized.

8. Schedule time to visit the property: Plan regular visits to your property to ensure everything is in order.

9. Hire a trustworthy property manager: A good property manager can handle day-to-day operations and tenant relations.

10. Embrace modern technology: Use property management software or other tech solutions for efficient management.

Remember, managing an out-of-state property may require additional planning and effort, but it can be a rewarding investment.

Hi Scheherazarde,

You are welcome.