All Forum Posts by: Joseph Coleman

@Ben Miller
You have a big advantage being able to use a VA loan!

For learning about VA loans I would speak directly with a lender that has experience with VA loans. Some investors share incorrect or misleading anecdotal information about loans, which just confuses borrowers. Also, Julien is right, a VA loan may or may not be the right loan product for you. A good lender will be able to walk you through options. VA loans have many unique characteristics like entitlement so you need an expert. BiggerPockets has a lender finder tool where you can can search for Georgia lenders that do VA loans. 

I would also check out local Real Estate meet ups to meet people who can teach you the local knowledge. It's amazing what you can learn from speaking with locals that you could never learn through a Google search. 

@Alfredo Alfaro did you find what you were looking for?  

Even if the lender is willing to do 100% financing, I would be extremely careful of this approach because the only way a lender will finance a property at 100% is if the reward is worth the risk. More risk requires more reward for the lender. The risk of default goes up dramatically when a borrower doesn't put any skin in the game. So your fees need to be so much higher that you would probably be better off taking money from an equity investor. 

On the other extreme paying for everything in 100% cash will really limit your growth but 100% financing is just too far to the other extreme. Unless you are in an extremely unique situation like if you were to be purchasing a property at a 50% discount and you have a trust fund setup to start paying out prior to when your payments start coming due. 

I would recommend speaking with your Lender and CPA every couple of months to plan for your next property because your taxes and qualifying for a loan go hand in hand. On an STR you may be able to file with a schedule C or schedule E. How you file and when you file will have an impact on your ability to qualify for your next loan loan. Ideally, your lender should have experience in RE investing and a breadth of different loan products they can offer to you. It will be a lot easier if your lender can act as a coach for how to best use debt as a tool to scale your portfolio.

BiggerPocket's Find An Agent search in the tool bar up top : ) I work for BP so I am biased but I did find my agent in Colorado using this tool and my agent was a major help in finding my STR legal property in a great STR market in CO.

I do highly recommend www.mortgageeducators.com 
I used them to pass my MLO exam. It really was not that hard compared to other types of tests. 
I personally got my MLO test completed but did not apply for the license - as my goal was for education purposes. Although this education is almost 100% focused on legal requirements and regulatory agencies. Your state RE regulatory agencies will be the best resource to determine the requirements for an MLO license. They usually have a phone number you can call. 

Hi Julius! Thank you for your question. BiggerPockets has some great articles on the topic of hard money to checkout. e.g. Guide to Hard Money 

Pros: 
-The underwriting by definition is based on the asset and not on the investor. Although some lenders still run a personal credit score 
-The funding process can be much faster compared to traditional lenders. 

Cons: 
-This industry is not nearly as regulated as consumer purpose mortgage lending. Be careful of lenders that charge for upfront fees or give unrealistic expectations during the initial underwriting process - lenders cannot provide accurate loan estimates until they receive detailed information about you and your property. 
-The interest rates and fees tend to also be higher but it's still much cheaper than bringing on an equity partner. 
-You typically need to bring MORE MONEY to the table but if you can find a property at a significant discount (e.g. 50% of the ARV - Costs) there are lenders that will fund 100% of the purchase and renovation. Those situations are rare. If you find any let me know : )

A couple more notes: 
-Hard money is best for investors that have liquid capital but want to get a little more leverage to scale. It is not intended to be used for a down payment or for investors that have no money. 
-The real reason why Hard Money can be so powerful is that it allows to you ADD VALUE to a property and participate in an arbitrage situation where you take a property from one market (typically off market properties that do not qualify for traditional financing) and taking this property to the much larger MLS market (where most of the buyers are). Once the property can be purchased with other types of loans like conventional or FHA it increases the value of the property because there is more demand for these types of properties.
-Hard money is a tool that allows investors to improve properties, improve communities and bring more functional and livable properties to the home buyer market. 

@Houston Anglin is your primary goal to decrease your DTI and increase your credit score by decreasing your credit utilization ratio to get more access to capital?

If so, I would talk with a broker that really understands the DSCR and conventional loan options.

The reason I say this is because most "private lenders" that offer DSCR loans do not report to the major credit bureaus so it's unlikely it would help improve your credit utilization ratio or credit score. 

The order in which you use a loan also matters. Depending on your situation it may be better to get a conventional loan then get a DSCR loan or vice versa. You need an expert on DSCR and conventional loans in your State in order to see which one is best for you. Also, it would not be a bad idea to involve your CPA. 

OneBrokerage is a great lender that understands both sides of this. You can see if they lend in your state by searching the BP Lender Finder tool. 

@Gabi Katan Many lenders are starting to create portals for investors to buy notes directly. 
e.g. 
https://alohaprivatelending.co...
https://www.fundthatflip.com/r...

Can you share a little bit more about your experience?
Have you invested in notes before?

I think other folks on BP would be very interested to learn more about your journey. 

Hi Everyone! I was reading through the Class Action Complaint put forth by Judge Andrea Wood recently and wanted to get some opinions on,

1. Is it true that the NAR is effectively operating as a cartel?

2. How do you think this legal process will conclude?

3. Would prohibiting price fixing by the NAR be a good thing or a bad thing for buyers and the real estate industry as a whole?

Background:
In the Class Action Complaint (linked below) the Judge accused the NAR of fixing prices and states,

"For decades, home buyers across America have been unwittingly paying too much for, and receiving too little from, services offered to them by real estate agent members of NAR.Despite agent representations (which NAR permits and encourages) that such services do not cost home buyers anything, home buyers in fact pay a hefty cost for these services—namely, supracompetitive commissions at levels fixed by the Defendants, which in turn lead to higher home prices paid by buyers...

as part of their membership, brokers must also agree to follow NAR’s rules, practices, and guidelines. These rules, which include a requirement that sellers set aside a portion of the purchase price for buyer-agent commissions, prohibitions on modifying the commission, and permission to filter listings by commission, all enable NAR, its co-defendants, and its members to maintain buyer-agent commissions at supra-competitive levels unrelated to brokers’ experience or the services provided, steer home buyers away from lower commission homes, and drive out discounters—among other harms."

The way that this reads, it sounds like the NAR is essentially being accused of operating as a cartel. If this is true, it makes one wonder why an anti-trust lawsuit has not come up before. 

https://webassets.inman.com/wp...