All Forum Posts by: Jon Puente

Hey Donnie, 

Can you qualify for a new mortgage without having the tenant or lease agreement in place? That will buy you some time in the process. You mentioned "We" so I am assuming there are 2 incomes involved to help offset DTI ratios.

If not, can you stretch out your closing on the new primary for 45-60 days, so that it gives you time to sort out the tenant situation?  Why would it take several months to get this done, unless you need to perform upgrades/construction to your existing townhome?

Great Question!

Hey Maryanne, 

You have 3 options - 

1) Refinance the 1st mortgages and do a DSCR or Regular cash-out refinance to pull equity (you will lose your current interest rates). 

2) Add a 2nd mortgage to each property in the form of a HELOC or HELOAN (both will have higher interest rates than refinancing the 1st note).

3) Leave them as-is, and save up or raise money for your next deal. 

All have pro's and cons so it really is up to you on where you want to take a hit in order to free up some money for scaling your portfolio.

Hey Erich,

You have done amazing, so dont discount your accomplishments! The truth is that return on equity and Cash on Cash return are all based on leverage. The more leverage you have, the higher the ROE and CoC are. Leverage also means risk and can be a double edge sword.

If you really want to pull some equity, then just do a portfolio DSCR Cash-out and put the equity to use and your ROE and CoC will go up, but then you also have more debt.

Hey Charles, 

Start with "Why".  Why are you a realtor?  Why are you cold calling them?  What do you want to help them?  Why is your job important to people? The more questions you ask, the better you will be. 

I am not saying to start a phone call with a paragraph, but you need to know why you are cold calling, and the people on the other side of the phone want to know why you are calling them. 

Great Question!

Hey Miyoshi,

You need someone who is going to lend you money, like a bank, mortgage broker, credit union, or someone who lends money to buy a house.  Talk to a couple of lenders and submit an application with them and see what they can pre-approve you for.  Once you have that info, you will be prepared to make offers on homes within that budget!

By the way, this is VERY easy to do, like you can get pre-approved in 1 day.

The financing wont just show up at your front door because why would it?  Finding a deal is important, but you can find deals all day long, and have no financing/money ready to go for them.

Hey Paulina, 

I am assuming you are looking to buy in CA and this primarily means one thing - Cashflow is hard to get with how high prices are, however appreciation will most likely be very strong the longer you hold. 

In the world of real estate, most transactions are on a spectrum:  They either cashflow heavy, appreciate heavy, or a decent blend of both (with neither being heavy).  California is an appreciation play longterm, so if you can sustain making small amounts of cashflow in the beginning and make sure those rooms are occupied, then yes I would. 

However, if having 1-2 vacant units for a sustained amount of time will make you go under, then I would not buy that property.  Cashflow on paper is not always cashflow in real life.

Great Question!

Hey Forester, 

Here is what I would do exactly in their shoes - 

1) Improve property as much as they can right now with the funds they have.  Address big red flags or issues needing to be fixed. BUDGET.

2) Apply for a HELOC or a fixed rate HELOAN with a local credit union (I do HELOC's but Credit Unions have better terms).

3) The credit union can do a normal appraisal to show work that has been done to show new and improved value (most go up to 95% LTV). If not, then just get a personal loan for the money needed.

3) Use the excess money to do rest of renovations and then do a cash-out refi to pay it all off with permanent financing with a mortgage broker.  They could do all of this in 1 year max, depending on if they are DIY'ers. 

Great Question!

Hey Kevin,

When a buyer goes under contract, they will pay Earnest Money or Due Diligence money.  This is like a deposit on the property until the deal makes it to closing.  So if people are making an offer and going under contract, they are also putting money where their mouth is. 

I guess if you have money like that (or maybe the deal is juicy enough) and are willing to lose thousands of dollars to get first dibs on a house, then that is what they are doing!

Hey Marti,

To be 100% honest, it sounds about right or close enough.  Could you save an extra $500-$1000 on the cost, sure! If you want to call around, then go for it.

However, on lower loan amounts (below 200K), rates are not great as it is. On top of that, you are buying an investment property with 20% down (if you want better terms, do 25% down).  Points are going to be on every available rate (for INV properties), its just a matter of how much, so you could raise the rate to 7.5% or 7.625%, but I bet it still has 1K-2K in points. 

If you want me to, I can refer you to one of our branch managers licensed in AL just to get a second opinion.  DM me if you want more info.  

Hey Alex, 

Using a First Time Buyer conventional loan with 3% down is for "First Time Buyers". If you already own a property or purchase an investment property, then you are no longer a first time buyer. 

If you want to do the 3% down, then you need to buy a primary residence first, and then everything after is normal financing/cash purchases.