All Forum Posts by: Jessica Angulo

I currently have 2 rental properties averaging $3,300/month in cashflow. I have 1 mortgage in my name (about $1500/month). My income is on the lower side since I have declared smaller amounts since 2022. (I still haven't done my 2023 returns since this has been weighing the decision).

That being said, I have a goal to buy another investment property this year and possibly do the BRRR strategy or a flip to get more capital on hand. I currently have 30K cash from the cash out refi I did on another property as well that could serve as a DP.

I would love to hear thoughts on what the best course of action would be to get more cash flowing into the portfolio. I would like to possibly purchase a multiplex 2-4 units that is a proven winner when comparing costs to return. would this be ideal? if so, what would be the best way to get the money to fund this without having to do partnerships?

First question would be: do you currently have an FHA loan?
FHA allows you to buy up to a fourplex with as little as 3.5% down payment.
1 unit does have to be a primary for the first year, and afterwards you’ll have 4 additional doors.
FHA does have some guidelines to purchasing due to job relocation or 100 miles away from your existing primary.

Do you currently have any mortgages appear on your credit?

0 Votes

Quote from @Jon Demma:

Hello,

New investor, still learning. Quick background -- own a small business(10 years) in MN that has $0 debt.

Would like to start our REI journey by converting our primary single family home into a rental. Purchased in 2017 for $305K, refi in 2020 for $236K at 3.25%, current value = $450K.

I know this is a very general question but I need some direction... Can someone point me in the right direction for the next steps to take? Anything to be on the look out for(good and bad)?

I will gladly give back once I have some experience under my belt. Thank you very much in advance for any help!!!

A couple of things to consider here:

1. Do you have funds for your next primary purchase or are you needing to tap into the equity to get closing costs and down payment?

2. You can access equity of current primary by a Home Equity Line of Credit (HELOC) or refinance. HELOCs have higher interest rate but much lower/to nearly no closing costs, refinancing has much higher closing costs but lower interest rate. Analyzing both numbers: new total payment and costs.
Also, look at how much your current primary could rent for, and ensure the rent will cover your new monthly payment.
3. Purchase a new primary with as little as 3% down, depending on your available capital for down payment. Your current mortgage payment will not affect DTI as long as you have a future tenant lined up prior to closing on your new primary.

1 Vote

Saint Paul, Minnesota

Quote from @Ben Lukes:

In episode 943 of the podcast the guest, Jeff, said that if you pay your debts through a business account for 12 months, they will no longer apply to your personal debt-to-income ratio (DTI). Does that apply to conventional loans in general?

If so, I'm wondering if that can help me out. I currently own a condo, a duplex, and my personal home (half of which is rented out) all under my own name. Would simply owning these properties through an LLC (with an associated business account) be enough to benefit from this? Is there some other way to have your rental mortgages paid through a business?

Hi Ben, what is the reason you are not wanting your rentals to affect your DTI and why are you thinking they are affecting you?
Knowing more specifics about your scenario and goal, will help provide a more customize approach for you.

For conventional financing, it depends how you are reporting your rentals on your tax returns, to determine how the income/expenses are netting in a positive or negative manner.

Yes, you can omit debt payments from your personal liabilities showing a 12-month history of being paid by a “third party”, which can be your business account.

Consider speaking with a CPA as well on how to better structure your investments.

If your goal is to purchase another investment property or to refinance such, you can use a specific mortgage for investment properties that does not use your personal income.

Happy to connect and further review your goals.

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Quote from @Zach Kirchoff:

Hello,

Looking to speak with an expert in the spec home lending space. Smaller developments (2-10 homes at a time) and lower price point (under $500k). Please let me know who your favorite lender in this space is!

Zach, have you been able to get financing through local banks?
Should you still need assistance, we are a Mortgage Brokerage and have specialty new construction loan options for me. Please reach out and I will advise what information is needed to review available financing for you.

0 Votes

Minneapolis, Minnesota

Quote from @Sean Wilt:

Hello,

I have 2 full time STVR Properties that have substantial home equity ($400k each). I am looking to be more active in real estate investing primarily in shorter term fix and flips. I spoke to my banker today and he indicated that they won't do a HELOC out of a home that is a rental - only from my personal residence. Is this typical? I also have substantial equity in my personal residence, but just something about borrowing from my life home makes me uncomfortable. Anyone know an option to get funds out of my STVRs on favorable terms? Looking for a LOC that I can get in and out of quickly and easily as I find deals and then cash out of deals.

Hi Sean, I've got a couple of fast HELOC options. Same day instant offer based on qualifications. We do require a 700 credit and up to 70% CLTV. *Soft pull only
If you want to move forward to see your options send me a message.

0 Votes

Quote from @James McGovern:

I am looking to stage a cash-out refinance to occur the same day I close on a property. I want to dump all my capital into a lucrative foreclosure property where on closing I will own it 100% and then immediately have a cash-out refinance the same day to extract some of my capital back out.

James, you can absolutely do this through a specific mortgage called Delayed Financing. Which allows you get up to 80% liquid. Terms are the same as a DSCR loan and you don't take a hit in pricing for a refi cash out when done as a "Delayed" financing.
The process can start the day after you close and usually takes about 3 weeks to get you the funds right back to your account.

Reach out if you’d like to discuss the process further and get you prepared.

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Waterbury, Connecticut

@Nicholas Olson, do the numbers first and then see what your options best align with your goals.

You most definitely can go in on a Fourplex with 3.5% down, primary residence, living in one of the units, find out what purchase power you have, and what the rent rolls for the other units will be to determine your cash flow.

Otherwise, look at what the same numbers are with 20% down payment.

What is your goal? Tax advantages, cash flow, appreciation, both, etc.

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Congratulations @Nick Sarangoulis for focusing on getting started in the real estate game.
Great thinking about purchasing your first property with only 3.5% down payment.

Keeping that in mind for an FHA loan, you can absolutely purchase a multi-family and it also must be your primary residence, or with conventional financing and only 3% down. Any scenario with the minimum out of pocket will have to be your primary. You can get gift funds from close relatives and also negotiate a seller contribution towards closing costs.

In order for you to buy in AZ and not have to put 20% down payment, it would have to become your primary and you'd be looking at a move. Now how can you qualify:
-your employer can write a letter stating you are or transitioning to 100% remote worker, if this is allowed;
-obtain a transfer letter with your current employer
-you can get an offer letter with a new company, letter must be non-contingent, and a guaranteed salary.

There are definitely multiple possibilities. First and foremost if you haven't already, review your purchasing power (income, credit, liabilities, etc) with a lender/mortgage broker, and keep on looking at opportunities.

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If you purchase within 6 months, do a DELAYED Financing, which allows you to access 80% LTV of purchase price with terms equal to a purchase (better rate than refi).

However, if improvements were substantial then indeed a Cash out refi will be your best bet, and depending on your credit score, and cash flow you will be between 75%-80%.

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Savannah, Georgia

Quote from @Brody Bice:

I’m looking to build my first spec home but I’m having trouble finding a lender. Most lenders require you to have two new builds of experience. For the last three years I have been a superintendent for a commercial construction company overseeing 40+ million worth of work. Since these projects were commercial jobs and not for myself I have not been able to find a lender. Any help?

Do you already have the lot or are you looking to finance it with the build out?
What's the acquisition cost, build out cost, exit strategy?

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Birmingham, Alabama

All Forum Posts by: Jessica Angulo

Jessica Angulo has started 1 posts and replied 17 times.

Post: Low Income & 2 rentals - Need advice on next steps to invest in real estate

Post: Starting Out - First Steps to Convert SFH Primary into Rental

Post: Paying debt with a business to improve personal DTI (episode 943)

Post: Loans on Spec Home Construction

Post: HELOC out of STVR Property

Post: Does this type of mortgage product exist?

Post: Finding the Money

Post: Acquiring 4 unit

Post: Best option to refinance a flip for a rental and get my money out of it

Post: New construction Investor