All Forum Posts by: Cara Lonsdale

Inspector, appraiser, escrow officer, even Realtor....none of them would prevent you from doing your own RE investing, and any of them would compliment your goals as an investor.  Of course if you become a Realtor, you need to make sure you are properly disclosing your licensing status to any potential Sellers or Buyers involved in your personal deals.

Best of luck to you!  If you decide you want to explore the Realtor route, PM me for some good advice. :)

Don't eliminate your wife.  I'm sure she's not all that bad of a debt!  LOL.  As I read that, it made me giggle, until I completed the sentence on the next line that referred to bad debt.  So, thanks for that chuckle.

OK, now onto more serious things.... This is really a choice best made from comparing options side by side.

First, the bad debt can sometimes get in the way of your DTI (Debt to Income) ratios, so is that an issue to consider?

Is the lower payment of not having mortgage insurance (PMI or MIP, depending on the loan type) worth more than the absence of the bad debt? In other words, where is the $XXX better spent? Let's say the mortgage insurance adds $100 to your loan. If you were to pay off the bad debt, would it result in a $100 or more per month savings? If the answer is yes, then there is an argument for paying the bad debt and taking on the mortgage insurance.

And so forth. So, I would have all of the options in front of me, and compare them. Take into account what each one GAINS you (lower payment, increased loan amount approvals, etc), and what each one CHEATS you of (DTI Ratios, paying MI, etc) and make the decision based on your needs.

I hope that helps.

 Right?!  I totally agree.  I think it attaches to much equity just to avoid the down payment.

This is GREAT NEWS, and I wanted to share it with anyone who wasn't aware.  This can really help those of you who are looking to house hack and/or anyone trying to use conventional financing.

The Federal Housing Finance Agency (FHFA) just announced that effective 1/1/2018, conforming loan limits have been increased in MANY states.  

What does this mean to you?  A price is established by the FHFA in every market.  If you purchase something at or below this established price, you are able to get a regular loan.  If you purchase something above this established price, you have to obtain a jumbo loan to purchase.  Jumbo loans are usually more expensive, and have higher interest rates.  

So having the established price increased means that you can borrow more money, while still getting the better rate and terms that a regular conforming loan can provide.

Below is a link that lists all the new loan limits.  It is organized by State and County for easy searching.

Hope this info was useful.  Have a good day BP community!

New FHFA Loan Limits Effective 1/1/2018

The white ones from HD SUCK!  They appear ok at first, but then they peel because the coating on them is not paint.  It's almost like a laminent.  And that is VERY painful for me to say because I LOVE HD, and go there for almost all of our rehab projects.

However, if you are leaning toward the White cabinets, I would suggest that you compare to Lowes.  Their white shaker cabinets have a painted finish, and look better long term.  We just finished a very small kitchen with the Lowes cabinets.  I have attached some pix.  We added some hardware, and it turned out great.  We got all kinds of compliments, and rented the property out at top dollar with multiple offers (FYI).

Now, I am ONLY speaking to the WHITE cabinets because of the finish type that HD uses for their white cabinets.  Their other finishes are painted, so if you choose a stain, then HD is right back in the game.  Their darker stains are really pretty.  We did the cognac in another rehab project, and it looks really rich and pretty.

Both HD and Lowes offer their cabs at 20% off serval times throughout the year, so check for the sale.  And since they price match each other, if 1 of them is doing the sale, and you want cabs from the other,  then just take it to the other one and have them price match the sale.

Also, HD offers unstained cabinets if you want to pick the stain, or paint them yourself.  FYI.  

Lastly, if you plan on spending $1500 or more, take your "shopping list" to the pro desk and have it run through the "bid room".  This is where they can offer further discounts for you on the project.  So add in your appliances, light fixtures and anything else you plan on buying for the project and run it through the bid room altogether for the deepest discount.

Best of luck!

You do NOT need to refinance the first property.  That is the greatest feature about a house HACK.  You get to take advantage of the best rates and lowest down payments by committing to live in the property for the minimum required length.  That's all you owe the lender.  Most lenders require a 12 month minimum owner occ.  If you have already satisfied that, then you can move out, and rent it out without an issue because you have already met your obligation to the lender.

NOW, if you used and FHA loan on the first house, you cannot use FHA again for the 2nd. It is a 1 at a time kind of loan. However, you don't need FHA to find a low down payment program. There are many conventional loans that offer 3-5% down. Some of them will also offer down payment assistance. So you will want to explore those options.

If the lender is suggesting that you refinance your 1st property, it may be because they want to do the loan, not because it is good advice.  So, be aware of your options.

As long as you fulfill your commitments for living in each property, there is nothing that says that you can't keep doing it over and over and over again.  That is the beauty of it.

If you want a good conventional lender referral, I would be happy to give you some names.  Just PM me.

I don't know the Bay area market, so I can't speak to specific pricing or downturn. I can only speak to SFH Vs Condo.

There are a few things to consider. First is price. If there is a narrow difference between the 2, then a SFH will be more in demand, and easier to rent/sell in most cases. And I agree with you that SFHs hold their value much better IN GENERAL than Condos, downturn or not.

Next, does the community have an FHA cert? Your condo pricing there may be beyond FHA loan limits, so this could be irrelevant. However, if it DOES have an FHA cert, it is a good indicator that there are more owner occupied residents than investor owned units. This is important when it comes to financing as FHA and other 3.5% down payment programs are appealing to first time home buyers that can't quite come up with the minimum 5% down for a conventional. However, these programs aren't offered to communities that don't hold an FHA condo cert. You can look up whether a community has a condo cert on the HUD site.

Lastly, what is the HOA fee? Is there a pad fee or any other fee too? How healthy is the community, and how often do they raise the HOA fee? This is important on two levels. First, you will need to know what the threshold for HOAs are in your area (how much are people willing to pay) to determine if the community you are looking at presents a selling detractor down the road. For instance, in AZ, it's about $200 per month. Unless there are other services included like AC, $200 is about all people here want to spend on an HOA. What that means is that communities with HOAs above $200 usually either sit longer on the market, or sell for less than they should for the type of property they are, or location they have. Again, that is an AZ example. I don't know what your thresholds are in the Bay area. Second, any HOA fee equates replaces a portion of a person's mortgage payment. So, you have to ask yourself. If someone added the $200 toward their mortgage payment, how much HOUSE could they buy? If the answer is better than the condo, then the SFH beat out the condo again.

Hope that wasn't too confusing.  Best of Luck to You! 

Some good suggestions here.  I would add to pull your own tri-merged credit report with scores.  The scores will cost you a few bucks, but having them will be worth it.  Then you can use this as you speak to lenders.  They will definitely need to pull your credit if you decide to move forward (so I am NOT suggesting that by pulling your own credit report that they lender won't).  However, it will give the lenders a basis for working up numbers for you based on programs they have requiring certain FICO scores.  

My question wouldn't be so much about the lenders taking you for a ride (not that it couldn't happen), but more about knowing the area you want to live in.  Do you know NC pretty well?  Not that a purchase now couldn't be a good flip or rental later, but just make sure that your initial purchase is researched from a location standpoint.  Know where you want to be.

I don't think either strategy is better than the other as they set out to accomplish different things, but here are a few questions/thoughts to consider....

Regarding getting a better deal in bulk - this isn't always true.  Sometimes it's just an investor liquidating a portfolio, but not discounting.  So that isn't a given.

The conventional method will give you more flexibility when it comes time to sell.  If you have them bundled, it is somewhat of a process to untie 1 or 2 units to sell them.  So, you may want to consider how you would handle a sale.

Conventional is generally (if not always) going to give you better rates and terms.  With that said.....have you considered purchasing the whole portfolio, but obtaining separate conventional loans on each of the 1-4s?  As long as any 1 parcel is 1-4 unit, you could close them simultaneously, or in short succession.

This would allow you to obtain the portfolio at a discount (if one is offered), AND receive the conventional financing.  Regarding higher closing costs, many title companies can put you on an investor rate for doing multiple deals, and many of the other fees associated are loan amount specific, so whether you do them all at once, or individually, it's the same.  (IE 1 point on $1MM is the same on 1 property as it is on 10 $100K properties.)  Your prorates should all be the same too.  So, really it would just be about the title fees (and title insurance).

 The Buyer was purchasing as sole and separate.  So the assumption at the time of contract was that the SOP didn't apply as the Spouse had no interest in the property (signed disclaimer deed).   But even if the guidelines still considered this a violation of the Arms Length, the point I was making was that this was ALL disclosed to the lender on the contract, but not disapproved of until the closing.  The lender had over 2 months to bring this to light and didn't.  My point was that these types of issues are flaws in the system.

And yes.  It was a 3% commission on a $400K+ property.  That isn't chump change to alot of people.