All Forum Posts by: Erich Martinez

@Michael Wentzel

I'm working with a couple lenders now, but yes I think it would be wise to have a backup.  Maybe you can message me the contact information?

Thank you so much for the help you provide, it is much appreciated.

Erich

I've got an offer accepted on a duplex and am currently have lined up a Credit Union to do the financing.  However, I always like to have a backup strategy and was looking for a lender with low reserve requirements, I.e. 2-3 months that services the Pueblo CO area?  Any help would be appreciated.

Thank you,
Erich

@Chad Bowman I've been doing my best to get statuses and updates each day and reviewing advise off of this page. The realtor is definitely in the loop, because I'll need to stay up to date with timelines. I was trying to secure a good deal was the main reason to buy two properties. If I can get the seller contract reworked, close on the SFH address, then the duplex closing will be easier.

@Jared Bouzek I used your calculations you sent and the bank is stating that the primary residence must be included in the calculation. I.e. 6 months of mortgage payments. After reviewing the Fannie Mae site, I'm interpreting that the principal residence should be excluded from the reserve calculation, meaning PITI and Unpaid Principal Balance (UPB). Based on your experience, do I need to include the primary residence PITI 6 months as reserves?

Thank you!

@Frank Chirkinian, I am not at risk since financing was a contingency.  There is some leeway in time as I did an inspection and the seller is making repairs.  I would need to see if we could extend the closing period though.  Thank you!
@Travis Sperr, Both units are for investments.  Thank you!  
@Jared Bouzek, this is excellent and I ran the numbers, but showing my reserves are aligned with the original figure the suggest, I.e. $72K.  I'm starting to believe there is a clerical error due to finding discrepancies on the applications.

Thank you all, I'm going to go through the applications, most likely with the Bank Manager and validate everything is aligned.  I noticed the bank sent a recent application to me just today, that showed my savings was $20K short and could be the culprit.  If the lender has incorrect application(s) figures, this would definitely throw off the reserve requirement for Fannie Mae.  Both homes required a 25% down payment.

Excellent advise, and truly appreciate it!

I'm working on two real estate deals and was pre-approved for both (a Single Family Home (SFH) and duplex). I've gotten appraisals on one property and inspections passed underwriter final review on the SFH. On the duplex, I worked hard to get funding, even sold my camaro based on reserves requested by the lender. The lender stated I needed $72K in reserves for both loans (termed - mirrored loans). Now underwriting is denying my duplex home loan due to Fannie Mae requirements stating I need about $84K, the requirement was not added as a stipulation on the SFH even though both properties went through this "mirrored" loan process.

Has anyone run into this situation?  I've  been thinking constantly of ways to find funding.  The bank won't accept my 401K because of the cash-out options, nor accept gift/borrowed funds.  

The next option was to pull the loan, and see if I could go with a portfolio lender while still maintaining the contract.  The only issue is I'm not sure when to tell the Realtor the current loan situation on the duplex.  Really trying to plan this wisely.  It does blow my mind the loan won't get accepted over $12K-$13K.   I'd love to hear ideas on how to handle this or workarounds.

Thank you,

Erich

@Chris H.
I'm actually doing a double closing on these locations

* Pueblo CO (~ 1 hr 50 mins from Denver) - Single Family

* Fort Morgan CO (~ 1 hr from Denver) - Duplex

I tend to look at online stats as well like population growth.  Pueblo CO (including surrounding areas like Pueblo West ) has about 165K people , whereas Fort Morgan has about 12K people.  After seeing Fort Morgan, it is a bit far, say there is a bubble, I do worry about the prices dropping substantially.  Its a smaller town, so I need to research more, but what attracted me were the higher rental rates, and values are going up.  I attribute this to the high demand in Denver and people looking for closer more affordable options.  

Now I am a tech guy and I actually see Pueblo CO doing better (talking future) here, and here is why.  I work remotely and have an excellent job.  I believe people like me don't care where they live and want value for there money not higher prices.  I've worked in Software/Engineering for a while, and many co-workers telecommute, and I believe this is a trend many people overlook.  Pueblo was actually on the most affordable list of places to live (top 10 in the country), these kind of things get you noticed.  I.e. I was looking at buying a $400K house in Pueblo West that would cost be $4 million in Denver.  The reason I didn't move from my Denver home was my kids wanted to stay in school with there friends and we have all our family here.

As far as comparison, Fort Morgan is a small city, but closer in proximity to Denver, so I'm still trying to grasp the job market there (from my understanding there are mostly Mill jobs), and am taking a chance.  Working with the Realtor/Property manager at this time it makes sense. However, looking at Pueblo, its a good size city, great internet (for people like me), low cost of living, they are expanding the Riverwalk the next 15 years, I wouldn't be surprised if we see a boom there.  Not sure if I can mention this, but the marijuana industry is growing pretty fast there, so there are jobs and don't see this fading away anytime soon. :-)

I hope this helps in your endeavors, but that's what makes life fun. I don't know if I will be around next year given I'm a Round 4 cancer survivor but believe you keep living, and in REI, make choices that fit your goals and make sense to you.

Take care and best of luck,
Erich

@Chris H. I believe it depends on your intent.  I'm fairly new in the Pueblo market but from my experience believe it is not ideal for flipping.  However, if your intent is to rehab and rent, then I believe Pueblo is a good market for that.  I know several investors in Pueblo, and they mainly do rentals.  Its not to say you couldn't flip, there is always an exception, but if your goal is to pursue the rental market, then Pueblo CO is a good option.

Erich

@Toussaint Hill thank you for posting this information.  If you have anything in the Colorado area I would be interested if you can pm me.

Thank you,

Erich

@Jordan Norwood

Its great to have new members, I've been on here for about 3 months now and have learned volumes. Properties I would have invested in the past I've learned to bypass, and look for "great deals" that have cash flow.  I'd recommend watching the webinars:

https://www.biggerpockets.com/webinar

There is some repetition if you watch the webinar's but I like it and it reinforces the basics.

Also, someone recommended books to read, I like the "No Money Down" and the "Book On Rental Property Investing".

Also, I've been using PRO which I think is incredible, especially the calculators, you mentioned BRRR so sounds like you may be using already. In any case they are located here:

https://www.biggerpockets.com/real-estate-investme...

Good luck on your ventures!

Erich

@Brandon Battle thank you, was thinking the same thing, better to be safe than sorry.