All Forum Posts by: Jesse Rivera

I am a software engineer working in Bay Area. I found out that:

Case 1. When doing business loan for 4+ units multifamily, my W2 can not be used to calculate DSCR. For the top tier area like Palo Alto where cap rate is 4.0%, LTV can only be limited to 40%~45%. For the 1.5M downpayment, the target price is only 2.5~2.73M.

Case 2. When doing residential loan for fourplex, my W2 + my partner's W2 can be used to calculate DTI. LTV can reach 70~80% even the cap rate is only 4.0%. For 1.5M downpayment, the target price can reach 5~7.5M if DTI is allowed.

Due to the big difference on target price, I raise this topic to confirm whether my understanding is correct or not.  I wonder whether expert can confirm this?

Because my DIT is low, maybe Case 2 for fourplex is my preferred loan type than Case 1 if I want to invest locally. Any advice is welcome.

The market is very competative in California. How are you finding FLIPS in your state?

@Kevin Moise

start with a live-in flip.  it sounds like you're in a perfect position to do that.  if you're willing to put up with the headache - that's your advantage.  or, even better: just start with a regular house hack that isn't distressed but just needs some cosmetic updates.  rent out the rooms to your friends and sleep in the basement or in a closet.  the more inconvenience you can put up with, the better you'll do.

beyond that a few random comments for you:

-lawyers don't usually recommend contractors.  so not sure how they would help or what you're trying to accomplish (but maybe there is something in what you're doing there that I'm missing?)  

-the best flips start with distressed, off market properties.  how will you establish a lead source for those?  difficult locally, spectacularly difficult out of state.

-are you going to meetups?  go to meetups.  go to all the meetups.  go to meetups 2 hours away.  inconvenience yourself to go to meetups.

hope this helps.  did i mention house hacking?  you should house hack.