All Forum Posts by: Matthew Wolk

I'm looking to buy my first investment property and I had a question. 

I own 40% of an LLC. Do the debts incurred by the business impact my DTI or are they viewed as a separate debt?

Hi all,

I am hoping to start my real estate investment journey and can't decide between either co-buying my first real estate property in LA vs buying an out of state investment property. 

For the first option I would co-buy with my sister who would then occupy the house and help find and manage renters. Co-buying would make it easier for me to pay a down and mortgage in an expensive area like LA and hopefully we could qualify for some owner occupant benefits (not sure about the details there). My concern with LA is that it would be difficult to find a property that works given the high prices and I'm not sure if I would take advantage of FHA loans because of it's high mortgage insurance cost.

On the other hand, I had initially thought to invest out of state by myself in a much more affordable home and rent out the place through a property manager. However, I would then need to purchase an investor mortgage and also I wouldn't be as familiar with the real estate market. In addition, I'm not clear on whether owner occupant mortgages are significantly better than investor mortgages.

I would be renting in both cases since I currently live in NYC and am not sure where I would want to stay long term. A third option I am entertaining is that I move out of state and house hack but that would be longer term as I haven't decided where. Wondering what others think or even details/things I have not considered. I am pretty lost here as to how to best get started...any advice would be welcomed. Thank you!

Hi, I live in Toronto, Ontario (Canada) and have $150k in equity in able to access. I would like to start purchasing student rentals which would have a purchase price of around $400k. I'm not able to be approved for a mortgage as my dti will be too high after pulling out equity. I'm considering partnering up with a friend and buying in cash. Would this be the best use of this money? Also, what would be the best form of taking out the equity?

Thanks

The situation

House is rented for $2,200/month. Property is currently in a bridge loan ($2,200/mo). Rehab took much longer than intended for various reasons numbers quit working as interest rates went up. I'm self employed so can't do conventional refinance. Looked into Hard Money refi as I did with another property but the amount out of pocket even with high appraisal was astronomical. Property is in an LLC. Can't co-sign on a refi. Estimated appraisal 350k-400k. But who knows with how the market has been as of late. Need to refi 305k that's in the bridge loan. The main issue is DSCR wont work out so any lender is going to require massive amount at closing to offset or reduce loan amount.

Options considered.

Take the hit on high closing with hard money and offset risk of a worse situation down the road (would basically eliminate all savings)

Extend bridge loan and hope one of the areas at issue improves 

"Sell" to friend/family and pay them 

Cosign on refi (was told cannot by lender) maybe a way around that?

rob bank? jk

Any clever ideas out there? I can't be the first person to have the numbers not work out after a rehab. Any help is greatly appreciated.

Sincerely, Nick 

Are you able to qualify for a DSCR loan when buying student housing in a college town. You can get more rent from students than if you rented the house as a single family. Will the DSCR lender look at the student housing comps or will they use the single family as there rent comps.

 @Matthew Wolk and @Lyndsay Zwirlein how does this negate the owner occupancy requirements. Vacant does not mean owner occupied.

My husband and I are wrapping up over a year long live in flip at our lake house that we plan to make a STR in the spring. We are under contract to sell our LTR and want to replace it with a second STR. Because we lived in that property over 2 of the last 5 years we don't have to worry about 1031.

We planned on purchasing a property with a DCSR loan but our realtor strongly advised that we do an FHA loan instead. We told him that we do *not* plan on living in this property and we plan on buying another (our dream home) sometime in the spring. He has more than insisted because of low down payment and interest rate, comparatively. We've never heard of using an FHA for a property that's not your primary residence and don't know if this is possible and what the consequences would be. We want to invest the right way but more importantly, we don't want to jeopardize our financing for our primary residence here in a few months. He suggested using a conventional loan in the spring for our primary residence. Our realtor is also on board with this and stating that this happens all the time.

We are on a journey to build our wealth and getting very close to financial freedom but we want to do it the right way. Any thoughts or advice would be so helpful. Thank you!

Poof! They are gone!