All Forum Posts by: Erik Browning

@Kerry Baird this is incredible. Thank you so much for providing this list as I get (and I'm sure other lenders get) a ton of questions about HELOCs on investment properties.

I did want to point out that there are 2 that you mention that have minor details associated with them.

Fremont Bank will do HELOCs up to 60% LTV (blah). Also they only service a handful of states.
Spring EQ will do a HE Loan (not a HELOC) on an investment up to 90% (I think most states). SpringEQ briefly had a HELOC product for a few months this year then they just removed it recently - I just spoke with them last week.

Again, thanks a bunch!

@Kate Glassman I'm surprised you didn't get a response here! You will likely get a different response from everyone however this is the way I look at it: 

TLDR: How do I buy a house? Crying. Keeping up with the Jones'. Educate and advocate.

Imagine you want something, something big (like a house as a FTHB), but you don't know how to get it. The first thing you do is download an app and see all the pretty houses with their pretty pictures. You scroll down, and you see an agent's mug and a phone number. Not knowing how to get the home and without any knowledge, you call that agent thinking they can help you because this is the first face you see. You soon realize that you need to get pre-approved from a lender so you can determine your maximum purchase price. You say, "who do I call about that?" to the agent because they are your only point of contact in the industry.

Because you talked to the agent and you feel comfortable with them (not that they are exceptional communicators, but instead because you don't know the difference between a good and bad agent), you then call the lender/broker that the agent suggested. Reminder this is likely the biggest purchase you will ever make in your life. This is your home - you are emotionally connected to it and, according to a recent poll, you will likely cry when you get the home. This event will mean so much in your life and you will talk to your friends and family about it. With the talking to friends and family about it, you will start throwing out numbers related to interest rates, fees, and purchase prices. And your equally uneducated friends will tell you things like: 

- that's a bad rate

- I got this rate (not understanding they paid $8k in points to get it)

- This person took care of me/didn't take care of me

- This company is garbage and didnt answer my questions or didn't communicate enough

At this point, you might get apprehensive and feel overwhelmed and stressed about the home buying process - not to mention being influenced by your friends and family with their incorrect and misinterpreted information. The number one complaint I hear from buyers is that there is too much paperwork. "I have to give you my tax returns?!" The number 2 complaint (actually a comment) is "my neighbor/friend/family member got this interest rate." You and I know rates and terms are solely based on each individual's financial profile, including their income, assets, credit, debts, the subject property, and their veteran status. And everyone's financial profile is unique, resulting in unique rates/terms/etc - like a snowflake.

Here's my point: You have to have the initial call with the home buyer and gauge their level of education on the home buying process and quickly fit their needs. They may be influenced by information from their neighbor, they may have a realtor telling them some BS, they may not understand how you get paid or how the agent gets paid. A good LO will educate their client where they need to be educated so that they are protected. It's our job to protect their best interest and get them the deal that makes the most sense for them financially, even if that means it's 1% higher than what their sister got.

You need to take the lead here, and you need to be their advocate (even if they are difficult) and protect their best interest while still moving the deal along. If they feel like they were taken care of and are fully educated on the loan, you will have a fan for life and they will refer other clients over to you.

Hi @Bianca Rodrigues I recommend going to a local real estate meetup group and networking with folks. You will eventually run into a private money lender and you can schedule a meeting or coffee date where you can ask questions and understand the product(s) they offer. I like to develop a personal relationship with a lender to see if we are a good fit (I prefer this because I'll refer clients to this person in the event they need one - I want to make sure they are taken care of).

Hey @Arsalan S., happy to hear you are moving forward with this, but to fully answer your question we'd have to know more details. I might be able to help, just need some more info. Sent you a DM

Quote from @Alex Olivera:

Most likely you're going to want to find a mortgage broker because the majority of people that will do these types of loans (in my experience) are wholesale lenders that generally deal with mortgage brokers. Usually the big banks don't want to deal with anything outside the box so you're looking for something more niche. You can do hard money although if you qualify for a foreign-national DSCR that will probably be more favorable than a true hard money loan. Below are some of the guidelines from one of the wholesale lenders I work with on their foreign national program. There are others but generally a lot of these are consistent.

 What lender has this program?

@Tyler Greenhagen first off, congrats. You're f****** doing it. You got the itch and now you need to scratch it harder. 

Continue doing what you are doing, but start looking for good people that believe in YOU - outside of you family. You family will always be there but like you said, you need to scale. You need to take on someone that is passionate about all or a part of your business and sees the opportunity to be an expert in one part of your company. Whether that is project management, contracting work, or finding homes. Build them up to be an expert in that part of the company and start to leave that responsibility to them. 

Concurrently, you need to network. You need to join groups, you need to learn from others that succeed in something that you are interested in. Maybe it's commercial projects, maybe it's big multifamilies, maybe it's small hotels. Whatever it is, talk to them. Tell them about what you have done and also listen to their success. The opportunities will present themselves, you just need to be available to participate in those conversations.

@Giani Brussich first want to tell you that I'm a Short Term Rental (STR) host and have a decent property that I rent out in the Phoenix area.

Here's the thing - STR owners are a disorganized and greedy bunch that capitalized on the opportunity to make substantial returns with full disregard of the neighborhood and the peace.

With that being their only goal, communities suffered as a result. Golf bros screaming in the middle of the night, hosts accepting shady characters, and bachelorette parties… oh, those bachelorette parties.

Because of the abuse, neighbors fought back - and they are exceptionally organized, especially the older folks, and have a mission to make “homes, not hotels.”

With these highly organized groups of neighbors that petition to their local governments, STR owners have earned a bad name.

Of course not all of us are abusing the system, but the offenders among us have ruined the opportunity (in some markets) because of their greed and disregard for the community.

Again, I'm a STR owner and I love the income. It will be a shame when it ends

I like Angel Oak - great service and excellent submission process. The team exhausts every effort to make a deal work and they are very fast. 24 hour turnarounds, well run business.

 In order to engage and set a roadmap, it's best to show documents. If your lender is any good, they will give you a roadmap for how to get to your goal. You don't have to run credit just yet, but having a full picture on your specific scenario will only benefit you and give you clear steps on how to achieve a purchase.

Hi @Alyssa Patterson, there are still other creative ways to purchase a home that require you to put less money down. You may not be equipped with the capital yet to buy as a traditional "investor," but you can still buy a primary residence that needs repair, fix it up, add an ADU, or some other upgrade, and then move out after 12 months. This strategy is kind of like investing with guardrails so you can understand the home purchase process as well as the costs of renovation, hiring contractors, and buying something you can afford.

I routinely facilitate loans for 0% down buyers in primary residences (VA and USDA). They just have to come up with the cash for the EMD & closing costs ($8k-$12k), which you have. This way, they can enter the market and perhaps capitalize on the projected appreciation while also securing the best possible financing terms as a primary residence. It's not true investing, however you can become familiar with the process as well as own something for yourself.