All Forum Posts by: Jeff Dulla

@Jordon Nichols It is a simple enough seeming question but of course it is more complicated in our business. There is a difference between a pre-qual and a pre-approval. And different lenders seem to call them different things. I guess the first question for the lender would be, what is all done with a pre-approval or pre-qual? Is it just a credit pull? Ask them to describe. 

If it is just a credit pull, then you may be looking at a 90 to 120 day window. If it is meant to be based on income and asset docs, those are only going to technically be good for a 60 to 90 day window before they "expire". 

It sounds like you are also worried about inquiries and re-pulling credit. I would say maybe wait until you are within 30 days or so and move forward with the pre-approval with someone. 

@John Hamrin Just my two cents on this John - there are all kinds of different investors and a lot of it depends on how much of their time/energy is going to be focused on just this. Are you going to make this your full time job and work it 40/50+ hours per week? Or are you going to have another job and this be supplemental. 

If it is the former, then you probably need to do as much as possible to learn about all the different financing avenues and how they differ. What types of properties you can get conforming loans with. Which ones need to be private money/"hard money". You should probably start getting familiar with what they call Non-QM or Non-Prime. I guess per what others have said, maybe you can go directly to the source, the sellers, whoever and do a lot of this on your end. If you do, you better learn the market or markets like they back of your hand. I tend to think you can't do a lot of this on your own and you need experts - a realtor, a GC, a lender, an attorney, etc. 

If it is the latter, put an even larger emphasis on the cast of experts. You need a good lender to talk with you, be honest with you, lay out a plan for some of the properties and the first ten properties you can use conventional financing on. They need to be honest enough to know when to refer you to commercial, Non-QM or private money. You need a real estate agent that knows the area better than you do, can spot a value, might have a network of people built up to find properties before they hit the market, etc. You definitely need a couple GC's you can trust and an attorney. I would say you best bet is to start building that cast of trusted advisers. 

Good luck on your adventure and well wishes! 

@Shawn Campbell When you have a chance, search "delayed financing". It describes exactly what you are talking about. Within first six months, you do not use the appraised value per say. You can only get back up to the amount you paid for the property, or loan to value restricted amount based on appraisal, whichever is lower. 

@Ryan K.

1. Banks do not typically look down on HELOCs as they are secured funds. Whether or not they impact your debt to income ratio negatively is another story. But the payments are interest only and a payment on $13,500 is going to be fairly nominal. 

2. I would stop applying for cards right now if you are trying to get a mortgage. Two main reasons - first to stop excessive inquiries on your credit and also to not draw on an unsecured line of credit for funds. If a bank sees deposits in your account that are from an unsecured line of credit/credit card, they will not count those funds for underwriting. 

3. Again, secured lines of credit are good. Those are a completely legit source of down payment. I would imagine it is going to be easier and cheaper to get one on your owner occupied home rather than an investment property though. 

@Ross Miller The question is more so at what cost? There are quite a few options for 15% down investment properties but the rate is a decent amount higher and typically it is ARM based rather than fixed. Even for a local bank, why would they add a layer of risk for themselves by offering a product they cannot sell to Fannie/Freddie, without at least adding in risk premium into the rate.

I guess if the numbers work on flow, who cares. But you should be able to find some options for less than 25% down. You can google some Non-Prime lenders like Angel Oak or Citadel. 

@Account Closed it isn’t necessarily the cheapest option but Non Prime loan products are becoming more and more available. Many have limits as high as 20 properties. They also allow you to qualify straight off the cash flow of the set property you are planning to buy. It is probably at least worth looking into for you. 

@Rush Wall Under conventional terms, you can only get that cash out within the first six months up to the amount you paid for the property originally or 75% loan to value (on SFH)/70% loan to value (on MFH), whichever is lower.

For example, the property is worth $150k but you paid $90k for it in cash - the most you can take out within the first six months is $90k (60% LTV). Is that what you are looking for or are you in search of a private lender that is going to make an exception and let you get full cash out (in which I do not know of any that will let you do so).

@Rush Wall are you trying to cash out within the first six months of owning (delayed financing)? What is the price point and loan amount your trying to get out?

@Antonio Porta I actually don't think so. I believe it is a carve out or special program that some large lenders have worked out with Freddie directly. I think you may have to go directly to UWM to find out. 

@Antonio Porta I would look into Home Possible with a few specific lenders. One being United Wholesale Mortgage. I can't speak on that county that you are talking about but in certain counties there are no income limitations period - this is different then the census tract based limitations. This is only running until the end of October.