All Forum Posts by: Koren Lavi

Hey @Alan Mills, I totally agree with @Devin Peterson. You want to have a few different options, which is why a broker who has a few different DSCR loan options is ideal. That way they can shop around for rate, LTV, origination fees, etc.

I use Jessica Khani ([email protected]; 3142650642) since she has a lot of loan product options, works with local investors here in Denver, and is very smart and creative when it comes to DSCR and hard money strategies!

@Elizabeth Naranjo, I have to agree with @Bill S., the reality is that most rehabs are done without permits. I work with a lot of flippers in the Denver Metro area and none of them obtain permits for their work unless its absolutely necessary or obvious. And that is because unfortunately pulling permits is a 2-4 month turnaround depending on the city. They also do this because they believe lack of permits on work does not affect re-sale in a hot market like Denver. I would mostly agree with them on that. 

I guess what you do next somewhat depends on how your deal is looking, and what your holding costs are. If you can break even or maybe even take a small loss going the permit route, that is probably the most prudent option. If you are going to take a big financial loss you may want to find the money outside of your hard money lender to finish the project off their books. If you can’t raise the capital yourself you could always look into second lien position lenders for the rehab costs.

@Brandon C.

Totally do-able. 

Find a good lender/loan officer. The LO I use for my investments can have you pre-approved same day if you submit all the necessary documents (pay stubs/W2, credit report, loan application, bank statements). If you have a clean file my LO can close 10-14 days after going under contract.

Data for July indicates that we are seeing increased days on market, increased active listings, and will likely see increased new listings, so your agent should be able to find a solid house hack option in the Denver area within 2-4 weeks. 

I would say 30 days is the quickest you could make it happen. 60 days would be a lot more comfortable, and less hectic of a process. 

@Irving Gonzalez

Usually you have 4 options for leveraging a property to help pay for another: selling, cash-out refinance, HELOC, or a home equity loan. With an interest rate in the 2s, cash-out refinance and selling should be out of the equation.

I work with a lot of investors who use HELOCs and home equity loans for down payments. They are not as scary as some make them out to be, you just want to be certain that you can regularly contribute to the principal of the HELOC/home equity loan (on top of your monthly interest only payments), so you can pay the balance off within a reasonable amount of time. With HELOCs and home equity loans you can typically pull out a max of 95% LTV, but that number could be less depending on credit, property type (primary vs investment), loan balance, etc. Based on the figures you gave, you have about $85k of equity in this property, and could have access to as much as $80k of that.

As a disclaimer, not all lenders would approve this, but there are definitely some that would. Make sure you find a good mortgage broker that has access to more than a few loan products. 

@Bradley Mair Yes!

This is a strong investing strategy and is known as the nomad method. My wife and I have been doing this since 2019 in the Denver area and its treated us well. 

The minimum time that lenders like to see you living in a primary residence is at least 12 months (although there are exceptions to this rule on the grounds of “life altering events”). 

And to clarify with some of the above responses, you CAN keep putting 5% down on subsequent primary residences. Not only can you put a low downpayment, but you also will get a lower interest rate on your mortgage each time you do this. The beautiful thing is when you move out of your primary residence and rent it out, your interest rate will stay the same 👌