All Forum Posts by: Mike Schofield

Adrian,

We have a great investing community here in Central Florida.  Check out CFRI.net and there are meetings around you.  For your house hack, that is a pretty standard purchase transaction.  I'd be happy to assist you with that.  

Many of the investors I work with get their properties off MLS or Loop net, but that part isn't my area of expertise. I can help you learn how these deals are funded institutionally speaking. There are many in CFRI who can help you learn to fund them using less traditional methods as well. Feel free to reach out with any questions.

Tara,

I wouldn't worry too much about what is the investor mindset, and worry more about what you are comfortable with.  There is a psychological benefit to having your home paid off or at least down.  If that is not your concern, there are some good options out there.  I'm personally not a huge fan of balloon notes, but they serve their purpose.   For most buy and hold loans you are going to need 20% down, closing costs, and at least 3 months (sometimes 6 months) of mortgage payments set a side.  If you are only considering the loans you mentioned your last option is the one that set's you up to save that the fastest, but you'll have to be good about saving it.

If you have enough equity and pretty good credit there is a first lien line of credit called the All in One loan.  It enables you to pay off your home quicker than traditional loans, but have the equity available to use for investments or emergencies as needed without having to constantly go get another home equity loan.  

Don't hesitate to reach out with questions if you have any.  

Nena,

As a lender, I struggle with the question you just asked.  If they don't have sufficient income we aren't doing them a service by putting them in a loan.  Now with that said, sometimes a person's income isn't correctly demonstrated by their tax documents.  There may be alternative ways of showing your income, for example bank statements or Verification of Employment.  I'm not licensed in TX, but if you have questions don't hesitate to reach out. 

Victor,

If you aren't already a member of CFRI (Central Florida Realty Investors), you should join.  There are a few people in the community who wholesale and some will take on a mentee, or at least point you in the right direction.  It's a great group of people to network with either way.  The Orange county meeting is tomorrow night.  I hope to see you there.

 If you have questions or want to bounce ideas, feel free to reach out.  My cell # is in my profile.

Nicole,

You can start with the money you have ($30K). You will have to buy intelligently though for sure. I have a 100% fix-n-flip loan where you would need to cover closing costs and maintain 6 months reserves (mortgage payments for 6 mos). You are going to need to be all in (purchase + rehab) at < 70% After Repair Value (ARV). The construction experience will need to be approved by the lender, so you may end up needing a general contractor too. Minimum loan amount is $100K, and construction terms can be 6 months or 12months, and you should plan for 4% to 6% on closing costs just in case. You are going to be paying interest only payments on the cash you have borrowed until you sell. As you gain experience, it will be much easier to qualify you, and get you better rates. Let me know if you want to have a phone call about it.

Miah,

There is an option for funding your deal without showing income docs. I would limit the # of people in your LLP to less than 4, as all of you will need to have your credit pulled, and you'll need to show at least 60 days of history on your assets. Depending on the state and the level of experience of the investment team, you'll need at least 20% down and closing costs, plus you'll need to show 6 months of mortgage payments in reserves. Feel free to contact me with questions, and I can talk you through the scenario.

You could reach out to your local REIA and see if there are any wholesalers in the area. You might also reach out to a realtor in the area who is knowledgeable about investing to help you find something priced right. The first thing I would recommend is to speak to a mortgage broker to get prequalified so you know what you can afford to buy. Depending on your goals there are some great loan products out there. I'm not sure I can write where you are, but if not I can recommend someone to help you.

Welcome to the investment community! If you haven't gotten involved with your local REIA, I'd recommend that you do. It's a great way to rub elbows with people who are doing exactly what you are trying to do. The networking is invaluable too. If you want someone who you can pick their brain on the lending side of things, feel free to reach out to me. Good luck!!

I agree with @Marty Boardman that you should not over improve the home if the goal is to rent it out. Also, avoid refinancing additional times if possible to avoid the fees. There are loans in which you can finance the renovation costs and have the loan based on the new expected value. This is permanent financing, and will eliminate the need for multiple closings. If you and the property qualify, it is conventional financing (FHA and VA have options too). The expectation of the lender in this scenario is that you are going to continue to live in it for a while though. If that is absolutely not going to happen we could still do an investor renovation loan, but with different rates than the conventional option.