All Forum Posts by: Jon Puente

Hey Corey, 

I want to empower you to know that you are the client.  You can do whatever you want to do!  You should call around to a few different lenders and see what they offer.   Most credit unions publish their rates online and show what terms they offer.  

There isn't a "bad" choice here, but there might be a better choice than a credit union.  Once you have 3 quotes to compare, you will feel more comfortable and educated about your decision.

Just FYI - My personal bank account is with a credit union, and I would beat their mortgage rates all day long.  So the answer is, it depends!

Hey Jordan,

FHA only dictates that the owner has to live in the property to be eligible, meaning it has to be considered a primary residence. As long as you are living there, you could airbnb the home and make some money, rent by the room, etc...

What most people do is own the property for 12 months first, and then you can move out and do whatever you want with the property!

Great Question!

Hey Steven, 

What I would do in your case is call around to some local lenders or credit unions for a HELOC. They typically have great processes and terms for those types of loans!

Great Question!

Hey Aaron,

I am actually in the same boat as we speak. I need a HELOC or fixed equity loan on my primary to use as a down payment on a new primary house. Here are my thoughts -

1) You need to know you are not going to OVER-use the HELOC or equity loan and buy random crap.  You only buy what you need and pay it back as soon as possible. It can be a slippery slope. 

2) You need to know that the money you are going to use is going to make a return for you to make more money, not lose money.  In my case, I am going to rent out my primary as a mid term rental and it should more than cover the 2nd debt payment as well as most of my new home's payment. 

3) You need to know if you are going to continue to make more money in the future or get raises to help suffice.  I would not do this if your income is going down or you feel a layoff coming between you or your wife.

This decision is more about career and lifestyle, than it is about math..  Great Question! 

Hey Robbie,

Great Question - Yes you may use an FHA loan even if its not your first property, as long as its your primary residence. FHA requires the property to be owner-occupied. Yes, you can always refinance out of an FHA loan and re-use an FHA loan on a new primary residence down the road!

Hey Kobe, 

Great Question! I have been a loan officer / broker for 2 years now and would be happy to share some tips - 

1) Yes there are very big differences in how people get paid.  Think about it like this - The more support, marketing, tools, software, underwriting team, processing team, etc.. that you have, the less you will get paid on each transaction.  You will have to do A LOT of loans to get paid a lot.   But it might be nice to have the support while you learn the business and regulations.

2) I prefer to work from home and I do currently work from home.  However there is a level of professionalism and teamwork that you get when going into an office.  Sometimes if you have questions or need help, it's easier to walk over to someone than to call or message.  However, given the level of technology these days, it's pretty easy to get help remotely.

3) Yes, each company uses a different software to process loans.  This can be a make or break in my opinion.  You want a company that uses state of the art tech.  A software that a lot of mortgage companies still use today is "Encompass" and its very outdated.  Technology plays a big part because you want something thats smooth, fast, easy to find answers, and gets the job done right away. 

Feel free to reach out via DM for any other questions! 

Hey Rob, 

The only way I can answer this is what would I do if I was in your shoes - 

1) I would only use a HELOC for minor items and repairs. You can get caught in a pinch buying a property with it, with the end goal of getting that money back out to pay it off. In a perfect world it works, but we live in a far from perfect world.

2) I would use DSCR loans or Traditional Investment financing to purchase properties the slow way and make sure the cashflow is there with conservative calculations. You could also work with wholesalers or FSBO looking for properties at a discount.

3) Lastly, a cash-out refinance on your properties is not a terrible idea, however just make sure you understand where interest rates are right now on that type of loan, so you can calculate the cashflow properly.   It could get very expensive to do a Cash-out refi right now, especially for INV properties. 

I know you said you dont have much time, but you have more time than you think.  I would not rush into something for a quick buck, because in Real Estate, that never happens. 

Hey Joe, 

Unfortunately, most lenders are going to want 2 years of business ownership because they are looking for the income on your tax returns to qualify for a mortgage.   It is very difficult to qualify for a mortgage with less than a year in business and no provable income on paper.  Your best bet is to wait it out and continue to grow your business for 2 years and try at that point.  

The only other options that may work (but most likely will not) is to do a NonQM loan, such as a business bank statement loan where you show cashflow deposits into your bank account.  However, you will need 15% to 20% down on those at minimum.

Hey Chris, 

In my opinion, I think 6 months of reserves is low, especially when having a few properties.  I would aim for 12 months of reserves.  I think anything above that would be excessive, but it depends on your level of riskiness! 

If you know you can produce income at a high level and are not afraid of next months paycheck, then you can go lower on reserves.  However, if you see a storm coming in the horizon, then I would stack up as much as you can until it passes.

Great Question!

Hey Tommesa, 

A great rule of thumb in this market is to find ways to NOT do the deal. Because housing is higher priced and rates have risen, your underwriting should be more conservative.  

1) Use 10% Cap Ex, 10% Vacancy, 10% Management and see if it still cashflows. 

2) Check HOA's fees and dues, as well as HOA regulation.  You might be surprised how expensive it is.

3) Go on the lower end of monthly rents in your area, not the median or upper. 

I think you will find its not as great of deal as you thought OR will force you to negotiate better to get the deal you need.  Right now is not a time to buy rentals with loose calculations.

Hope this helps!!