All Forum Posts by: Axel Scaggs

Quote from @Shiloh Lundahl:

This is such an interesting question. And I don't think it is as clear cut as people are saying. I get a lot of loans every year and the questions depend on the bank the and the loan officer.

Currently I am looking at getting a US based loan on a property that I own in Costa Rica. They are doing their underwriting process. They know that I own a lot of real estate, but they are only asking me questions about properties that I own where the initial debt was was taken out in my own name (qualifying loans or non-DSCR loans) before I transferred them into LLCs. Those are the only properties I need to give a specific accounting for as far as my debt goes. They use the rent payments to offset the debt if I have rented the properties for a couple of years. All the other real estate in my businesses are counted as assets minus the debt liabilities for net worth purposes and the business income that comes to me is counted as part of my personal income. It really depends on the bank and the banker.

The best is to work with a seasoned banker who knows the system well and knows which questions to ask investors and which not to ask investors. Because, for instance, if I am flipping a couple of properties and I am in the middle of the rehab, but it will take a couple of months for them to get finished and sold, I may be paying $4000 on hard money debt payments per month, and if that debt is included in whether or not I will qualify for a refinance, then I may not qualify. Even though those debts are temporary. So my loan officer may direct me to not disclose those properties while applying for the refinance.  

If something is disclosed then it will be counted against you so just ask the loan officer some qualifying questions to see what you need to disclose. Questions such as:

- What type of real estate do you want me to disclose?

- Do you want me to disclose real estate owned in my own name or real estate owned in my businesses too if my businesses qualified for the debt? 

- Do you want me to disclose real estate that I may own if the debt was guanenteed by someone else? Etc.

You both want to make the loan happen so just ask questions and then disclose according to what the loan officer directs you to disclose.  If while asking the questions the loan officer says that the sub to property that you are getting ready to buy would become an issue then just close on the sub to property after you close on your refinance. 

Thank you for the different perspective! It sounds like I just need to be transparent with the loan officer. I will probably wait until the loan is finalized to do anything to be on the safe side regardless this time. I feel like the seller would wait and I could just buy it in cash since I do plan to refinance it anyway and pull out the equity once I’ve done some repairs/upgrades. I know a lot of people want to make the seller hold the property 2-5 years in their name, but I don’t feel like that is very fair to the seller.

Quote from @Jay Hurst:

Quote from @Axel Scaggs:

I recently found a Subject To deal that works for me. However, I'm in the middle of a cash-out refinance of an investment property I already own. My question is, if I was to proceed with the Subject To deal, will this somehow be discovered? Am I better off just waiting until the refinance is complete? I wasn't really sure how it would pop up, but don't see a reason to risk things and complicate my cash-out.

 It would "pop up" because you do not want to commit mortgage fraud. 

Thank you for the response. I wasn’t sure how that would all work considering I wasn’t taking on debt per se, but there is indeed a promise to make payments on the mortgage. Definitely want to do things right, sorry if it seemed like I was trying to skirt around the law 👍🏻

Quote from @Brandon Croucier:

What kind of refinance are you doing?

 A cash-out refinance on a different property I own unrelated to the Subject To deal.

I recently found a Subject To deal that works for me. However, I'm in the middle of a cash-out refinance of an investment property I already own. My question is, if I was to proceed with the Subject To deal, will this somehow be discovered? Am I better off just waiting until the refinance is complete? I wasn't really sure how it would pop up, but don't see a reason to risk things and complicate my cash-out.

Quote from @Robert Ellis:

Quote from @Axel Scaggs:

Hi everyone, I've really enjoyed all the info I've found on this site! I have a few questions for some of the investors on here. I'm looking to invest out of my home state, Texas, and have narrowed it down to 3 markets. I'm open to other suggestions as well, but especially interested in any info/suggestions regarding the markets listed below. Further context, I have zero debt, high 700s credit score, one other investment property here locally. 175k in cash available, looking to do DSCR loans or cash and then refinance.

Peoria, Illinois- Great need for lower income housing, market appears to have many options.

Lawton, Oklahoma- Looking only at extremely cheap properties, as it seems it’s not terribly hard to find renters. However, looks like there is a harsh line as far as what locals can afford and if you go over that, vacancy is high.

Watertown, NY- I’ve seen many great multi-family properties in the low to mid 100s. Rents seem high and in demand as well. Not sure what I’m missing here, seems almost too good to be true.

Any insight, suggestions, or general thoughts! Once again, love the site and community here thanks everyone!

 none of the above 

Any insight into other options? I'm looking for easier entrance and cash-flow rather than appreciation for the first few properties.

Quote from @Alyxus Nerio:

Lawton, Oklahoma- Looking only at extremely cheap properties, as it seems it’s not terribly hard to find renters. However, looks like there is a harsh line as far as what locals can afford and if you go over that, vacancy is high.

-- lawton is a very cheap market and has a high demand for renters. You do have to make sure to price correctly. Also being open to section 8 could help with keeping vacancy rate low. Lawton has a majority of renters, so long as your rental rate is priced correctly. Then you can expect to get it rented.  

Thank you both for your reply! Are you familiar with Lawton or have you seen a lot of successful investments there? Are there any other markets that really pop and stand out for cash-flow and easy entrance?

Hi everyone, I've really enjoyed all the info I've found on this site! I have a few questions for some of the investors on here. I'm looking to invest out of my home state, Texas, and have narrowed it down to 3 markets. I'm open to other suggestions as well, but especially interested in any info/suggestions regarding the markets listed below. Further context, I have zero debt, high 700s credit score, one other investment property here locally. 175k in cash available, looking to do DSCR loans or cash and then refinance.

Peoria, Illinois- Great need for lower income housing, market appears to have many options.

Lawton, Oklahoma- Looking only at extremely cheap properties, as it seems it’s not terribly hard to find renters. However, looks like there is a harsh line as far as what locals can afford and if you go over that, vacancy is high.

Watertown, NY- I’ve seen many great multi-family properties in the low to mid 100s. Rents seem high and in demand as well. Not sure what I’m missing here, seems almost too good to be true.

Any insight, suggestions, or general thoughts! Once again, love the site and community here thanks everyone!

Hi, I’m looking for advice from the professionals who have already achieved what I’m looking to accomplish. I would like to own 4-6 properties in the next three years. In this market, is it wise to invest in real estate right now?

Here’s a rundown of my current situation:

- Own an S-Corp (landscaping) generating 70k a year

- 160k in available cash funds

- Credit score around 720

- Zero debt

- Own one property valued at 365k, 30% equity

- Property is rented by the room generating $400 a month after mortgage and taxes

- Additional 590sqft house is being built in rear of property for 60k. This cost was already deducted, leaving available funds at the aforementioned 160k after the build. Should rent for $1000-1200. Undecided.

-I live in a modest apartment in the center of the Denton square

- Denton Tx is a college town and there are many renters, especially college students

My question is, if you were in my situation, what is the best first move here? Traditional mortgage, DSCR loan, brrr method? I’m wondering if the brrr method is even feasible in the current market? Anyway, I don’t know if this is a dumb question or too vague, but I’ve really enjoyed the Bigger Pockets website and all the info on here. Let me know if you guys have any suggestions!

Quote from @Alex T.:

@Axel Scaggs And just realized this is a 3-year old post...womp, womp. But yeah, let us know what happened!

Wow I stumbled upon this old post by accident, as now I’m a landlord looking for advice lol. For all those wondering, he did indeed counter-sue me and won. However, I appealed which took the case to a higher court and he settled the day before the trial for the full rent + all my attorney fees. Hopefully that helps someone out in the future. 

Let's hope so. He contacted me again through text and says he will countersue if I take him to court. He is now claiming new tenants took possession of the house a month after they actually did, and therefore he will sue me for the month of lost rent. I'm definitely taking him to court.