All Forum Posts by: Nathan Yee

Originally posted by @Account Closed:

Hey Antoine,
If you're in the Los Angeles area or in a nearby coastal city, you should come out to the BP meeting in Santa Monica on second Saturday's of every month. Send me your email address if you want me to send you details. Welcome again!

Very interested. I'd like to get some more details regarding this

@Michael Cohen - the price point for properties I'm evaluating are as follows: $650K and under (SFH) and $800K and under (multi-family). I'm estimating up to $35K in rehab costs for both types.

Interested as well. Using Parker Stanbury LLP via LegalShield, but based on my experience, they don't appear to be investor friendly. However, they do have attorneys that focus on real-estate.

I'm still racking my brain around this news:

http://www.marketwatch.com/story/couple-buys-posh-san-francisco-street-from-right-under-homeowners-feet-2017-08-07

http://www.sfchronicle.com/bayarea/matier-ross/article/Rich-SF-residents-get-a-shock-Someone-bought-11738236.php

In sum:
A couple bought a private street w/homes in the multi-million dollar range at a city auction after the local homeowner's association failed to pay $994 in back taxes and fees

Sounds like a good investment to me....wow!

Hi Everyone,

I've been researching home renovation loans (FHA 203K and Fannie Mae Homestyle Renovation Loan [which I recently discovered]) for my first, owner-occupied property in Los Angeles and wanted to know which home renovation loan made the most sense based on my current scenario.

Currently, I have a high credit score (800+) with a stable six-figure W2 job and a $50,000 down-payment allotment.

Here's the data I've found:

2017 Mortgage Loan Limits in Los Angeles County are as follows: (Fannie Mae bumped up their loan limits for high cost areas)

Source:

https://www.fanniemae.com/singlefamily/loan-limits

-1-unit - $636,150

-2-unit - $814,500

-3-unit - $984,525

-4-unit - $1,223,475

FHA 203K vs. Fannie Mae Homestyle Renovation

Sources:

https://themortgagereports.com/14946/fha-203k-loan-mortgage-lender-rates (FHA 203K)

https://thelendersnetwork.com/fha-pmi-mip-chart/ (FHA Mortgage Insurance Premium Rates)

https://themortgagereports.com/18836/homestyle-renovation-loan-fannie-mae-craig-berry (Fannie Mae Homestyle Renovation)

https://themortgagereports.com/21895/fannie-mae-homestyle-vs-fha-203k-renovation-loan (FHA 203K vs. Fannie Mae Homestyle Renovation)

FHA 203K (Pros)

-Must be owner occupied

-Lower Credit Score requirements (as low as 580)

-Lower down payment requirements (as low as 3.5%)

-Low interest rates

-Down payment and closing costs can be given as a gift

-Streamline refinancing (no home reappraisal, credit check, or income verification)

FHA 203K (Cons)

-Upfront Mortgage Insurance payment (~1.75%) and monthly for life of the loan

-Need to secure reputable contractors, and need to be very diligent with paperwork

-Lengthy Loan process (~45-60 days based on my research)

-Rehab Limitations under Streamline FHA 203K ($35,000 max rehab budget + requires 15% contingency in case of cost overruns)

Most non-structural, non-luxury items are acceptable:

-Kitchen and bathroom remodels

-Appliance replacement

-Carpet and flooring

-Roof replacement

-Painting

-Repairing safety and health issues

-Energy-efficient improvements

Fannie Mae Homestyle (Pros)

-Doesn’t have to be owner occupied

-Any type of renovation or repair is eligible (as long as it’s permanently affixed to the home and adds value)

-Loan-to-Value is based on your home’s expected future value and not its value today

-Renovations must be completed in 12 months and seller concessions are permitted (home sellers can pay closing costs if you add to your contract)

-No upfront Mortgage Insurance Premium

-Potentially lower Mortgage Insurance costs (if you’re putting less than 20% down) based on down payment and credit score

Fannie Mae Homestyle (Cons)

-Higher down payment requirements (as low as 5% for 1-unit, 15% for 2-unit, 25% for 3-4 unit)

-Higher credit score requirement (as low as 620 for primary residences, as low as 700 for second home or investment property

If you were in my situation, what type of home renovation loan would you use?

Hello BP Community, I'm considering the loan type I want to use for the purchase of my first property. The FHA 203K looks to be the front runner. With a future buy and hold exit strategy in mind, can you cash-out refinance out of an FHA 203K loan to a conventional one - once 80% Loan-to Value (LTV) is reached, thereby extracting cash out (for the next investment property) while dropping the Mortgage Premium Insurance (MIP). Once you cash-out refinance from an FHA 203K to a conventional loan, what typically happens to your mortgage rate? Does it go up? If I cash out refinance once I have an 80% LTV, wouldn't my LTV go back up after the cash-out?

Any help or advise is greatly appreciated.

BusinessInsider is hit-or-miss for me. Sometimes they come out with helpful bits to think about, while other articles are downright satirical. Although this is an opinion piece, I feel its direction is horribly misguided. I would like to invite the BP community to dissect what this individual is writing and where he is coming from. What are your thoughts? http://www.businessinsider.com/why-ill-never-buy-a-home-again-2015-6?utm_content=buffer476ba&utm_medium=social&utm_source=facebook.com&utm_campaign=buffer

@James Wise  

Thank you for the advice. I'll look into the feasibility of a duplex. It's a pretty expensive market out in LA. 

Thanks for the recommendation, Jenkins.  I've been hooked on the podcast.

Hi everyone! My name is Nate and I'm 28 years-old from Los Angeles, CA. I feel that I'm arriving a little late to the BP party, but better late than never, right? 

So a little about me:

Currently, I'm a second-year FEMBA student attending UC Irvine in Southern California. I concurrently hold a full-time, contracted job as a Management Consultant working on a Cybersecurity project for a large utilities client. Admittedly, I am somewhat "ADD" when it comes to projects, so the career works well for me. New and frequent changes in my professional life switching from one client to the next have always been welcome and invigorating. But please don't confuse my "ADD" as impatience...I've never wanted to be "stuck in rut" as I feel it's detrimental to your well-being and places self-limits on your potential. 

Unfortunately, this hasn't translated well to an interest I've had in real-estate. Up until this point, my interest has been more passive. I've been sidelined over the last year viewing real-estate investing as something I'd like to do in the future, but without taking the actionable steps to immerse myself in the learning process and the network/community. 

Then there's another factor: I still live with my folks, who are of the more fiscally conservative variety. *On a side note, shout out to my parents for their understanding and love. Because of them, I'll be able to graduate with an MBA debt-free with more than a little saved up. I consider myself lucky and have so much gratitude towards them.

Back to my story...

Living with my folks has instilled this burning desire to get out on my own again. I've always had an aversion to renting from someone else, although I understand it does have its place. This is probably the main reason why I'm living with my parents. I thought that my main goal was to save and build enough capital to buy a place to call my own. In Los Angeles that's easier said than done. I've watched friends get outbid by all cash offers above asking price and deals come and go in a matter of days.  So I thought to myself, maybe I need to change my strategy a bit and learn more about real-estate, especially real-estate investing. About the same time, a close friend turned me on to the BP podcast when I mentioned I wanted to be more serious about real-estate investing. Wow mind blown...

So what are my real-estate investing interests/goals:

-I carry a J-O-B, and haven't considered replacing it with a career in real-estate investing. This would definitely be something "on the side". I say this loosely because I know it's so much work. But you never know...

-I want to own multiple properties (3-5, or a lot more) that create an income stream, so buy-hold scenarios interest me (whether its condos or SFH, I'm not quite sure). Local markets are preferred as I've known this area my whole life.

-Wholesaling has me curious due to its ability to generate capital for future deals, but I wonder about its effectiveness in the LA market (it's crazy out here to find a deal).

-Partnering with other investors would be ideal. Let's face it, others have more money and experience than I do. But I'm willing to learn this business and do it right.

-Meeting other individuals including lenders, appraisers, attorneys, contractors, etc. to help with my real-estate pursuits and expand my knowledge.

-Joining a local real-estate club where I can network with people nearby and hopefully find a mentor. Until I can figure out a way to truly add value, I'll always buy lunch!

I'm sure there are other things as well, but to prevent this post from becoming more long winded than it already is, I'll stop here. Thanks everyone, I look forward to meeting some of you soon! Any advice and tips are welcome!