All Forum Posts by: Ko Kashiwagi

Hi Zachary,

Congratulations of having such good deal! Yes, lenders are able to provide commercial cash out refinance based on income, similar to a residential DSCR. Rates and terms would certainly depend on what kind of commercial you opt for. For example, a light documentation program would require less debt-to-coverage ratio, but the rates would be higher (7-10 right now). Alternatively, with a full documentation program, assuming you are in a market that cash flows well, you can get better rates but the requirements are higher.

Hi Luke,

It looks like you are in a great position to buy with 220k. You may have issues getting loans with conventional programs due to your mortgage as conventional looks at your personal DTI. With that being said, you credit score is very high, which would qualify you for business purpose programs like hard-money and rentals. The most common strategy here would be to do:

1. BRRRR - higher risk, but you can roll the cash over and over to scale quickly. You should be able to buy your second rental after 4-6 month after your first rental purchase. To lower your risk, you can opt for projects with less rehabs like cosmetic rehab.

2. DSCR Rental - lower risk, and you can use the 220k to even buy 2 rentals. If the value of the properties go up, you can also cash-out refinance and buy more rentals.

Ultimately, it's about preference and risk tolerance. Off course, there are many other strategies like house-hacking, STR, MTR, multi-family, flips and more.

Hi Syed,

Seems like you have a good amount of options with 150k. If you are willing to leverage your capital to the max, you could definitely invest in Seattle - house hacking or BRRRRs with hard-money would allow you to put less than 20% down. If your brother is open to house hacking, you can rent out the current property and live in the new one. With hard-money, most lenders would finance up to 80-90% of purchase price with most of the rehab costs.

Alternatively, there are great investment areas outside of Seattle in Washington, like Spokane (rentals) and north of Seattle. I'm also wondering if you have space for an ADU for your current house, as this is a popular trend in Seattle.

Hi Erik,

It sounds like you are in a great place to start. The FHA has more stringent guidelines to qualify than other conventional programs. If you are able to cash flow (at least after moving out) at 3.5% down, then this seems like a great idea - you can put in 3.5% down (3.5% of $550k is $19,250)) and rent out all units after 1 year. You can also do a house hack BRRRR, where you fix up the property as you live in it, that way you can cash out refinance.

However, if you are unable to refinance, it may be smarter to put a higher down payment (say 5-10%) given you have a lot of cash. This all depends on your income and risk tolerance. Once you gain familiarity with you first investment, you could ideally do more house hacks or investments.

Hi Chris,

Have you looked into the possibility of accessing your equity in your existing portfolio (ex. HELOC on your primary residence)? There are also credit cards that have zero interest over 6-12 months which you can roll over from one form another. Alternatively, I think a hard money could make sense if you are making a good profit.

Hi Jonathan,

Local banks and credit union may be able to help you. Most lenders have a requirements above 75-100k loan amounts. We can offer above 65k, but I haven't seen lenders go any lower recently.

Hi Kaylee,

House hacking can be a fantastic way to get started. Obtaining the right financing is a key step to nailing house hacking, especially given your unique situation with a self-employed partner. It's also great that you're planning to start this process early, as building a strong relationship with a lender and understanding your financing options will certainly position you well for your first purchase.

We offer conventional loans for a buyers with a variety of background. I'm happy to help.

Hi Braden,

Personally, it would depend on what % would allow you to cash flow. If the properties in your area can cash flow at 3.5% FHA, by all means this is not a bad idea. However, in appreciated markets, it requires a higher downpayment to cash flow. It can also depend on the amount you are able to save every month, as this will allow you to afford negative cash flow at least in the first year.

Hi Alejandro,

Welcome to the community! If you do not have a US citizenship/green card, there are some complications investing especially financing so it's really important to do research. It would benefit a lot if you are able to obtain US credit, US LLC and US Bank Account. Best of luck!

Hi David,

Are you looking for a conventional or a business-purpose loan?

Either way, you can also pay it off in 15 years with no prepayment penalty.