All Forum Posts by: Keira Hamilton

Hey Ian! I don't know that one option is necessarily better than the other, it just depends on which fits best with your long term plan and your current resources. With an owner occupied property you're likely going to get better loan terms and potentially have to put less down. Keep in mind that if you put down less than 20% you'll need to pay PMI, but it might end up being worth it to you if the goal is to preserve capital for your next deal. You'll also need to meet the occupancy requirement, which is usually one year.

If you're looking to make some aggressive moves, I don't think purchasing a SFH just for yourself to live in is going to get you the greatest gains. House hacking could be a great option because it would allow you to qualify for owner-occupied financing but still collect rents to help pay the mortgage.

Lenders don't typically finance a purchase at 100%, unless you have a strong pre-existing relationship as others have mentioned. You could get up to 100% of the rehab costs financed, but the purchase is likely to be at least 25% down. 

What's the purchase price of the home and how much are you expecting to put in for rehab?

I use Avail for lease templates and to post my listings. They also have a payment feature and I think a work order system, but I don't use those. I only have 3 units so I just have my tenants pay/contact me directly, but could be useful for some people.

Hey @Clark Hsu! Can you clarify what you're looking to do here? It sounds like there are two separate projects: starting a care facility and purchasing an investment property. Or are these connected?

You mentioned starting a facility from the ground up. Would you be willing to purchase an existing instead? What amount of capital are you planning to devote to this endeavor?

@Benji Halpern I would definitely recommend getting connected with a realtor in Idaho who can help you better understand the market. A good realtor will be able to explain sales trends and suggest the best areas for a rental.

Since it sounds like this property is going to be non-owner occupied, you're probably looking at 20-25% down. Keep in mind you'll need some capital for closing and lenders also like to see some reserves left over.

A DSCR loan would be a great option for you, so finding a property with strong cashflow or potential cashflow will be key.

Do you also have other income? For primary residences, your DTI (debt to income) is very important. So even if a lender was willing to consider your rental income and even if it covered the first mortgage, they would still need to see other sources of income to qualify you for the second mortgage.

If income becomes a prohibitive factor here, you could explore non-owner occupied opportunities as those wouldn't require proof of personal income.

Hey Jonathan. Lenders typically aren't going to allow you to use a loan as down payment for another loan. I'm not quite sure what you meant by "hard money loan" as people can use that term differently, but even if say you were getting money from a family member for a down payment, the lender would likely need documentation confirming the money was a gift and not a loan as they want to make sure you're not over leveraged.

How much money do you have for a down payment? Perhaps you could just purchase one of the properties you mentioned?

I really like house hacking as an option, especially for new investors. But, you're right, the income piece is very important. I'm not familiar with this strategy your CPA is suggesting. It would be legit, I just haven't heard of it. Curious to hear what others think.

I would recommend looking into investment properties. With a commercial loan, you can go the DSCR route. Basically, what that means is that lenders will be looking at the income or potential income of the property, not your personal income, when determining the loan terms. The only personal financial piece they really care about it your credit score.

Hi Taylor. Something to keep in mind is that financing for distressed properties is going to be more challenging if you're new to investing. Lenders want to make sure that you're going to be able to pay back the loan, and for rehabs that's dependent on your ability to achieve the ARV and get it rented out at a market rate. You'd probably have a pretty good shot at getting financing for a minor cosmetic rehab, but anything major (tearing down/adding walls, anything structural) will require direct experience within the last 3 years.

That's not to say you won't be able to find properties with value add opportunities. You want to look for properties that are in good enough condition for a lender to approve as is, but might just need some sprucing up. Some paint, maybe some new flooring, a few new fixtures, and updated landscaping can go a long way and still be cost efficient.

Hey Stephen! If you're talking about purchasing an investment property, you won't need to show income returns. With a DSCR loan, the only personal financial information lenders really care about is your FICO. Rather than focusing on your personal income, they're focusing on the income of the property to ensure it can cover the monthly payment. There will sometimes be a rate increase for non-US citizens, but you could always use your wife on the application.