All Forum Posts by: Meg K.

Back to square one. How do i find a good agent? Someone who has my interests in mind instead of assuming they can take advantage of a newbie? The last agent i had seemed inexperienced because he gave me wrong answers to my questions a couple times, then he did not contact me/answer my texts when i turned down the first deal.

Thanks for your feedback.

Meg

Thank you everyone. I also really need PATIENCE and not feel like i have to move ahead with every deal i come across :) #Newbie

@Bryan H. I just read that i cant use a HELOC to buy a home (still waiting to hear back from the bank)....i'm new to this so i do not even know how to figure out the ROI. Purchase price "as is" 28000...rentometer puts rents at $550-$675 but realistically i would go at $550...

What about using a HELOC?

Meg

I decided to seek out private lenders because the bank deal was not working out. The Lending Club interest i got is 18%...for 3 years ...is this worth it for a duplex house with 2 BD each selling for 28k? It appears all the rental income, if paid monthly, would go to paying back the loan for the full 3 years. The upside is that after 3 years I would not have a loan on the house. The area is not great but i did not see any vacant houses on that street. The seller does not want to go through agents or bank. Seller says roof needs replacement. I do not have a lot of cash for "surprises"

Any feedback?

THanks, Meg

Yes, that is normal. This is because the lower the amount, the less money the bank will make, hence the higher interest rate. Some banks will not even finance below a certain amount. My lender required that the property cost $60k or above for me to get a FHA 203k loan. I found a property for $55k. The broker advised that I add $10k-$25k for rehabbing!! Then the bank that owned the property refused to accept a rehab loan. I walked away. Crazy rules have been implemented in the last few years i guess.

I am not sure about CA laws, but i found out that lenders are suspicious if your next property is within 50 miles of previous property and will call it an investment. I read about doing that but when i recently tried to do it, it did not work. The lender asked why i was leaving my current house in the same city! (Rochester, NY). Things have changed in the last 5 years i guess. Us newbies are late in this game.

Most banks are requiring 20% down for a single family and 25% for 2-4 units...do not forget other monies (closing costs, etc)...you end up putting down double of down payment amount. I just went through this and unfortunately i cannot afford that cash. I am looking into private lenders. Good luck!

Thank you Dawn. I am new here...first post :-)...I will check out the other resources on here

This is an answer i received from the loan officer. I am frustrated because a deal i wanted fell through when the Bank that was selling the property refused my FHA 203k loan...then i tried a conventional loan. The bank wants 25% down and i have to pay points ince I wanted to borrow under $40,000...that's $13k down on a $28800 property...this is my first investment...i do not have 13k for a down payment...below is a reply from the loan officer about FHA loans...i am feeling discouraged!

In most cases the min required is 3.5% down, however since FHA has recently changed their mortgage insurance requirements and increased the premium on their mortgage insurance, we aren't seeing many loans with under 5% down and a 30yr term getting past the application process.

Is there a specific reason you would like to go FHA? I don't normally recommend the program to folks unless they cannot qualify for any other program or do not have the 5% required for a conventional mortgage... the PMI rates on FHA are extremely high now due the changes implemented on 6/1.

Any feedback? THanks, Meg