All Forum Posts by: Jason Wray

Quote from @Todd Anderson:

@Nick Henry,

As others have said the answer has to be both.  

I work with investors from California all the time that are able to find good cash flow in a growing market where the appreciation is obvious.

I agree with @Jason Wray that many of the investors I talk with from the West Coast find that the markets in the sunshine belt work far better for their investments.  We are able to find many areas that are steadily in the top 10 in growth nationwide.

I would also tel investors like yourself to look at the new construction space.  with a new home in a growing market you will be able to get in the way of appreciation without having to put more money into the deal.  They also rent for a good rate day one which helps the cash flow.  let me know if I can help answer more questions.  

Best of luck.

Nick,

Todd is correct and I would take him up on his offer I am just North of Cape Coral where he is at and its another Hot market.  You can build a Vacation home down there and put less money down and still rent it out and later just transition it into a full time rental!

I have heard a lot of things of the "Seven Isands project" and that alon will help enhance the Cape Coral market.

Nick,

As you already know since you mentioned it living in California means look to other states for your prime investments. In states like Indiana, Ohio, Texas, Florida, Tenn, Georgia and a few others you do not have to pick appreciation or cash flow. Instead you will cash flow right out of the gate and appreciation is faster in those states with TLC properties or adding things like an ADU, or Carriage home on a bigger lot.

Most of my investors that live in CA purchase in those states listed above and in most cases its easy to introduce them to local Seasoned realtors Contractors, Handy Men/Women that can help them save money and feel secure about the distance from home to REI. Buying in Indiana and Ohio for example have been on fire over the last 3-5 years. This is mostly due to affordability and for potential ARV options.

I had a good friend buy a property in Indianapolis off of Union Street for $60K she put $48K into the home which was a total dump and was able to refinance the home to pull cash out in 12 months. The appraisal came in at $285K from a $60K purchase and $48K in work or $108K total. Thats a great way to profit of $177K in a year but she did know the contractors and the has an eye for those type of quick turn arounds.

You will see multifamily 2-4 units a ton of duplex 2 units for under $250K again these are usually not turnkey fully renovated properties but they will pass an appraisal without being subject to any major repairs. There is a lot of gentrification going on un several area which help that quicker appreciation.

If you ever have any questions feel free to reach out or send me an email, I enjoy helping other BP members.

David,

Yes, investing out of state can be a wise choice especially if you live in a State like CA, NY, NJ, CT where home prices are over priced and taxes are brutally high. Not to say you cannot find a deal in many of those states but for a first time investor wanting to be cost efficient it makes little sense to stick to those states.

You do have states like Indiana, Ohio, Tenn, Florida, Georgia, Texas that offer higher inventory of home prices even 2-4 unit multifamily that are under $200K. The taxes and affordable insurances also help the cash flow on top of normal to above market rents in some neighborhoods.

There are several ways to find out which cities/areas cash flow and get a good idea of things like market rents, ARV potential, and future appreciation. Bigger pockets is a great place to start by asking advice to those who live or invest in certain states/cities. REI websites that offer sales data usually offer market rents when you switch to the rents option. Meet-ups via local groups or via zoom calls or private REI clubs/groups.

Asking a seasoned agent in each city/county as well as a Banker/Loan officer will also help put a plan together. Its extremely important to know your numbers upfront from approved sale price, Maximum or Minimum downpayments, programs, costs, and seller credits. Each one of those things can make or break an approval and the end goal of cash flow.

Feel free to reach out I enjoy helping and those states are where I focus as well as my friends, family and my customers/investors.

Joseph,

I would give Taylor Friend a call I have sent her several of my approved buyers from the bank only looking for 2-4 units investment rentals.  You can just Google her for St.James and she pops right up for the phone and email.  Not sure if I can post here but feel free to reach out to me or send me an email.  Always happy to help other BP investors!

Quote from @Greg Downey:

@Jason Wray, I totally agree with @Brandon Croucier's comments. Small shop brokers that have access to multiple programs so that they aren't beholden to one or just a few loan programs will typically get the most competitive product for the borrower. 

Since this is a post about our loan shop, I'll highlight that we are a small loan shop (30 employees), family-owned just trying to get more clients by placing their loans well and treating customers well.

@Jason Wray, The reason that our shop is pretty hot about your post is two-fold, we do all of the things that you are implying that we don't (other than government loans, we don't work in that space). 

You seem to know how many lenders we have "signed-up" on our platform. I'll restate that there are no lenders that are "signed-up". That isn't what we do. But, since you seem to be implying very specific things, but without being specific. Please clarify, how many lenders we have "signed up" and how much they "pay" for "leads". Again, there are a lot of things that you are implying about our business on a platform where the information will stay for others to read in the future. I typically don't comment on other's businesses unless I know from personal experience. For instance, I wouldn't comment about your business. Frankly, I'm sure you do a good job in the space where you work. I wouldn't have any reason to believe otherwise. We refer folks to bank-type lenders regularly throughout the year when that make more sense for our clients. 

So, once more, please clarify how many lenders we work with and how much we charge for them to buy our leads (hint hint, there is no answer here as this is not how we work). You also implied that we don't specifically price deals for our clients and the client's "rates and fees will be much higher". We don't bait and switch, we work deals based on actual details of the client's specific deal. Implying bait and switch is pretty bold, please provide specific examples OR possibly consider not implying this about a loan shop that you clearly don't know much about. 

Greg,

You are correct I made some opinions based on reviews and a youtube video I watched where the first thing the gentleman said is "We are Not a lender". We take your info and we let Lenders battle for the deal offering their best options. When I say "lenders signed up" it may have been a poor way to explain your proxy but again you "Do not" have every lender or bank using your platform.

So my opinion was simply, instead of putting your info out there and having it sent to multiple lenders, do more research and find a bigger Bank or lender based on your criteria. Main reason why I am a little skeptical is because I have had experience with companies that offer to find a "best lender" similar to bankrate. You cannot cherry pick a lender its not that easy you have to be more involved as a Banker or Loan officer.

If you are not a lender my first thought was how welll versed are your point of contacts to assist a borrower unless its done through your software. As an example, DSCR is based on the DSCR ratio and qualifying Rent to PITI ratio. I am not sure how much you get involved but do your employees contact the realtor and discuss market rents, do the math to check leases versus market rents and which lenders use the "lesser of the two".

Closing in an LLC versus personal name can also add a rate hit as well as Escrow or No escrow. If you do all of that and more its a great set up and I can appreciate that but as a banker for over 19 years I have heard a lot of war stories of lead companies or lender finder websites failing customers. If you need me delete my posts I have no problem I am not trying to give you a bad review.

I was offering my opinion based on knowing you are "Not a lender" so for me seasoning and being familiar with guide lines is crucial in offering an investor the right guidance and direction for financing.

Diana,

Absolutely 100% check out other states especially Indiana and Ohio for start. I have investors in California that only buy in Indiana and Ohio because there is a ton of inventory and the prices are great. You can still buy a Duplex in Indianapolis or Dayton as well as other cities for under $200K. Now that includes taxes at 1% of sale price in most cases and insurance that is affordable.

best thing to do is line yourself up with a seasoned realtor and build a network who you can trust. Bigger Pockets can help provide most of those professionals for you and lean on them to find the home, renovate if needed, manage, etc. A realtor can send you a walk through 360 which can be good enough to get in on some listings to make an offer.

Once you make the offer fly out and do a personal walk through and then figure out do you want to self manage or hire a local manager. Ask your agent or one of use to find a good handy man/woman and you basically have your team.

Quote from @Brandon Croucier:

Hi Kathy, at the end of the day the mortgage industry is so vast & wide it's essentially like trying to navigate the Sahara Desert.

I highly recommend working with an experienced mortgage broker who knows the ins and outs of the industry to place you into the most competitive product for you.

More times than not, people save money working with a small shop broker.

Kathy,

I wanted to revisit this to offer a a tad bit more and Brandon above is correct. As I mentioned every person and their criteria is going to require a different loan program and each loan gets risk graded based on several factors. Now to every ones credit that works for this company that made a comment after mine I appreciate them keeping it professional.

My comments were not to scare you away from them or any lender in general, I just do not think websites that say they are going to provide you with the best lender for you when in theory they only have a select few options. They do not offer every bank or lender out there or the lenders would never get a lead.

When I say FDIC what I mean is "Fully Delegated" and not just Full Eagle where FDIC Mortgage banks have better rates (which they do) because retail it's or wholesale and not selling the loan to meet a branch bucket or Loan officer compensation plan. It means underwriting the loans like FHA, Fannie Mae, Freddie Mac, USDA, Portfolio because we are Fully delegated. Lenders broker out 90% of their deals and do not hold loans for more than 3 months in general.

So does one want a "middle man" or do you want to go directly to the bank? Same as insurance why call John Doe's insurance shop down the road when you can call StateFarm for example and save money directly. I am sure they are a good company that offers some great options but in all fairness if you are not using all of the banks and lenders in the US how can you say your are providing a customer with the best finance option?

You can say the best out of the limited number of lenders they have signed up under their company but not in general to the vast majority or finance options under all banks and lenders. It does serve a purpose if you are not picky and just looking to have a few lenders try and beat each others fee's/APR.

Again to those working at that company I am not trying to take away what you offer but it is limited which must be explained. Same thing as Bankrate for example they use a very specific model to price those rates and scenarios like 740 Fico, 70LTV, 15 year term and the APR is never really talked about when it comes to margin and points charged.

So when your fico score, LTV, loan size or DTI deviates from that very specific loan scenario then they say in all websites required by law "rates are subject to change" hint hint! The rates and fee's will be much higher...

Just want to be clear I was not trying to talk bad about that company I am just not fond of lead companies and a website if it states will find you the best lender if they are not using all of the banks and lenders available.  

Kathy,

When you use those websites you are getting stuck with a small list of lenders that sign up on their website and services. So essentially whom ever is paying them or they single out is the lender you get stuck with and it may not be the best one. It's the same thing when you put your info on sites like Zillow, or Redfin looking for a home.

You are only going to get the realtors or lenders who are signed up with the website. That does not mean you are getting the best one unfortunately. It's a very lucrative business to start a website and drive traffic to then turn around and sell the leads to realtors or lenders. There are thousands of websites out there that are disguised as helping the public find the best of the best but at the end of the day its simply taking your info and selling it to a 3rd party as a lead.

If you are trying to buy a home or an investment property and you have good to excellent credit you should always use an FDIC Bank or Credit Union. A lender is the middle man who will sell your loan to the big banks and in most cases charge you points and higher fee's to support the branch and loan officers commissions.

If you are trying to compare fee's or rates this forum is great for helping with that type of question.  Just keep in mind each persons situation is completely different and small things can make a big difference in rates, fee's points, terms, etc. 

But in terms of the company you asked about a quick search shows there are a lot of people that are not happy with the service.

Freddie Mac only offers financing for single properties they do not offer 'Portfolio loans" meaning bundle them all into one loan. That is a true portfolio loan with a commercial loan and through a commercial lender or bank that provides portfolio lending.

Freddie Mac will allow you to finance each property and the Maximum is 10 loans on credit. Some banks and lenders will cut you off at 6-7 even if your DTI is below the normal percentage. While other banks will allow 10 on credit and then allow you to switch to a DSCR or actual portfolio loan to free up credit.

Brandon,

Great program I try and promote it daily and if more younger people knew about this in advance it would help shape more real estate investors.  Not only that but it helps more people avoid high rents and offer more opportunities down the road to pull cash out of the home once it appreciates.

Typically you have to own without selling or refinancing in certain sates for 2-3 years and some states or programs 1year.  Again its different in each state and for which program you choose but there are over a dozen of these programs.  You can also roll your closing costs into the DPA and the rates are monitored to generally be less than market rates to help more local development.

I have teamed up with many of my realtors for this 2025 year because there are some great New programs with additional benefits for first time buyers.  Getting the word out is the part where it takes a strong team and Bigger pockets is doing a great job so far!