All Forum Posts by: John Ching

Yes, the lender can call in your loan at any time for any reason. It is in your loan paperwork. However, that being said, I completely agree with D Eady's comment. Even though it is a small town and, "word gets around", the bank cannot make a judgment call on your ability to repay the line of credit simply because you quit your job. Just make sure you continue to make your payments on time (obviously).

@Damian Mandina, Ryan Billingsley pretty much nailed it on the head. I've been doing residential lending since 2003 and never heard of a lender asking for additional insurance . Homeowner's insurance simply covers the loss of the physical property.

The only thing that even remotely comes to mind would be mortgage insurance, but I have never seen mortgage insurance factor into a HELOC?

What bank or lender is this?

GL, I'm with Jesse Gonzalez (I also do conventional lending). You need to provide a little more information for us, mainly the long-term goals for your primary residence. 

Contrary to popular belief, (most) ARM's were not a major contributor to the great financial disaster of the past decade. The reason being is that nearly all ARM's originated on the past 10 years or so have actually seen their rates remain the same or decrease slightly. Yes, I know, hard to believe based on the media hype.

Is there a reason you are going with a portfolio product vs. conventional lending? Would you not qualify? What are the reasons for refinancing now? Are you cashing out? Paying off debt? We need details to offer the best advice...

Derek, it's been said, but fantastic job! It's inspiring to know that you were able to pull this property from the MLS. Hidden gems abound. Did you have trouble financing the purchase with HM?

Also, I agree with you about using higher-end fixtures/finishes in your flips. It will pay you back many times over simply in good karma.

Hey Dave, welcome. I'm a new investor (in Missouri) here in Springfield.  Let me know how the deals are in Joplin, SGF is only an hour away!

The SGF market seems to have a lot of investors, relative to the deals, but I think if I adjust my profit margins (expectations) slightly, that would open things up more.

Hey Sherry, just curious, did any of the info here pan out with regards to finding owners of vacant properties?

Hey Gage,

I know I am late to the game in regards to your post date, but since I found it, I thought I might chime in for future reference. I'm relatively new to investing but have 13 years of mortgage lending experience.

Sounds like you are going the traditional route of getting financed through a bank (conventional lending) for this deal. I'll build on what Mitch S wrote which is to say most (bank) lenders have a minimum threshold of $50-$75K loan amounts. 

However, you may find your local community banks to be a source of funding through their own portfolio (which means they will hold and service the note). Interest rates may differ slightly from conventional lending simply because of the type of deal and/or property being financed.

To answer your question, yes, banks want to see 2-years work history. Not necessarily at the same company, but within the same line of work, make sense? However, there are slight variations. For example, if you graduated with a 4-year degree in Petroleum Engineering and have been working at Exxon-Mobile for the past 9 months, the underwriting guidelines should say that is acceptable.

Also, typical bank loans require down-payments. Private lenders or 'hard money' might be one avenue to explore for this deal, depending on what your strategy is with the property. Buy and hold? Or fix and flip? Wholesale? What's your exit strategy?

These are the types of questions you need to ask yourself when looking at your deals and financing types.

Good luck and feel free to contact me if you wish to discuss further.

Cheers.

John

John A, you are absolutely correct! BTW, I'm a So Cal native looking to move to North County SD as soon as possible. Love the Leucadia/Encinitas area as my gf grew up in east county.

I'd like to start investing in that area as well, since we plan on living in SD. Is there a strong REI group locally to you?

Ty, 

You are absolutely correct that it never hurts to ask! What's the worst they can tell you, "no"? OK, you're in the same boat as you were!

In my opinion, you should focus on 1 or 2 properties at first and see how the entire process works (i.e. search, find, buy, fix, hold & refi equity out/sell & cash-out, rinse & repeat), to give yourself a good knowledge base to pull from.

However, I am sure there are more seasoned investors who would chime in as to their experiences. I'm just jumping back into the game and working with a very conservative partner.

Ty D,

I like your approach of using your LOC and CC in conjunction to buy and fix/flip/rent properties. Just be sure to keep your lines of credit and payments straight! Hahaha...But seriously, keep in mind how you would utilize that CC with regards to paying for things.

Will your contractor take CC for payment? Or, will you utilize convenience checks to access the amount available? Keep those extra fees in mind as they will add up.

As a mortgage banker, I'll tell you it's easier to refinance a traditional investment property (NOO or Non-Owner Occupied) with at least 50% equity. 75% is doable, but at 50%, restrictions and guidelines become more favorable. Lenders usually allow rental income to be used in qualifying at the 50% mark, although 2 years of rental/lease income history are usually required.

Of course I'm referring to conventional lending, whereas private money will come at a higher rate albeit with more flexible terms.

Good luck! Hit me up if you have any further questions with regards to lending.

Cheers,

John