All Forum Posts by: Jim Blackburn

Now that we are entering the HOME PURCHASE SEASON....  here are just a few ways we can help.

1 - 2% DOWN PAYMENT GIFT PROGRAM - 2% assistance does NOT have to be paid back as long as the Buyer lives in the home for 1 year. (Example: 400k purchase price, 12k down, 8k assistance, 388,000 loan amount). (All 50 States)

2 - A LITTLE 'TLC' HOME RENOVATION PROGRAM - Get both the cash to buy the house AND the cash to fix it! (Example: 300k purchase price, 100k renovations, 380,000 loan amount).

3 - 10% MATCHING DOWN PAYMENT INVESTMENT - Get up to 10% matching down payment, enabling the Buyer to get into a bigger home and not have to make any payment on 10% of the price! (Example: 600k purchase price, 60k down, 60k matching investment, 480,000 loan amount. Upon selling the property, own pays back the 10% plus 35% of the total gain.) (ONLY IN AZ, CA, CT, DC, IL, MA, MD, NJ, NY, OR, PA, VA, WA)

HOW TO MAKE A PERSONAL INTRODUCTION: If you can think of anyone who might be thinking of buying a new home and who would love to get more information, simply send an email to [email protected] and copy the person you are introducing. If your Personal Introduction calls us instead, please make sure they mention your name so we can show our appreciation. Best number is 773.234.2584.

Let's make it a great year! 

Jim Blackburn Mortgage at Guaranteed Rate

Ralph Naval Welcome! Nice to e-meet you Ralph Naval One of the best ways a new investor can get started, in my opinion is by purchasing a 4 unit property as their very first purchase. LA County ... Here the county loan limit for a 4 unit property is 1.3m. That enables you to buy and control 1.3m of real estate with just 46. The seller can cover the closing costs & escrows. Plus we need to have another 3 months in reserves. Call it 18k.. So all together you need about 70k total saved right now. We live in one unit, and rent out the other 3. In some cases the rents from 3 may be enough to cover the living expense in unit we live in. In most cases, the rental income will make our cost of living in our unit much cheaper than it ever would be if we bought our own condo or single family house. This is an FHA loan. Typically you can only use FHA one time. Unless you have a really good letter of explanation that details the reasons why you are moving out of your current primary and into a new house using FHA a second time. (Ie. having a baby, moving to other side of town for job, etc.) If the exception is granted, then we get to use FHA twice allowing us to control more real estate with only 3.5% out of our pocket! Where many investors make a big mistake, is buying single family or condo first... then trying to acquire a 4 unit later. It's much more difficult to convince the underwriter that you are moving out of a comfortable private space , and into a building shared with 3 other families. Then you are stuck putting down 25% to acquire that 4 unit as investment VS the 3.5% FHA as primary residence. Long story short.. by purchasing the 4 unit as your first property, you're able to acquire, control, and benefit from the appreciation of 4 units with just about 46k down (3.5%) vs about 325k down payment (25%) later. How long would it take us to save up 325k? Plus, when you buy and investment, you also need 6 months cash reserves as well. Super happy to have you in the group and I’m excited to continue talking!

Kevin Anderson How you finance both properties will depend on how much savings you have available in bank and retirement accounts. Home possible is an excellent way to get into to the 4 flat with 5% as long as your fico score is above 720. If it's less than 720, then FHA may be better since the monthly mortgage insurance factor would be .8 vs conventional would be slightly higher. Also fha allows just 3.5% down. 25% is minimum down for 4 unit investment since you can't use home possible twice. We had to be very careful and strategic within the guidelines when sourcing "gift funds" since gift funds are not allowed for investment properties. Would love to talk more. Ask anything. Jim Blackburn

Ziaur, Your real estate is going to appreciate the same --- whether or not you have a mortgage attached to it. When you put your $200,000 on to your mortgage, your net internal return rate on your 200,000 is 0%. Rates/costs of capital are low right now. If you can borrow at 4%, and gross 10% return on your investment, then you net 6% on the spread. Of course there is the element of risk. You could lose your 200,000 by putting at risk. So, it really becomes a question about your desire for reward matched with your tolerance for risk. I'd like to talk more! Ask anything. Jim Blackburn

Casey Havenor You would want to work with a portfolio lender that allows cash out on non-warrantable condos. Ask Anything Jim Blackburn

Aaron Hunt 1. LLC protection. No not necessary. Buy an umbrellla insurance policy on your primary residence instead. It will also be much easier to find the best combination of rates and cost credits available by not closing in LLC. 2. When do I need to hire a CPA? No need for first few properties . Simply enter rental income and expenses on schedule E. so easy. 3. Do I need a lawyer on board? No. Keep your costs low. Unless you have to go to court then hire one. 4. Leverage techniques for a multi-family. Best place to start isn't to Buy a 4 unit with fha with just 3.5% down and live in one unit. 5. Opportunity costs of a rehab project vs day-job? Fha 203 k will give you the funds for purchase and for the renovations. 3.5% down of total combined loan amounts. Ask Anything. Happy to help. Jim Blackburn

David Siegel Hi! Nice to see you.. Titling property in LLC in San Diego makes it difficult to find the best financing. Titling property in LLC is also not the only way to get protection from liability claims. One other solution is by simply adding an umbrella policy in the 1-2 mil range to your primary residence. The premiums are reasonable and it affords a similar protection. I can refer a good insurance agent if you like. If we absolutely must close in LLC for personal reasons, there are just a couple portfolio options out there with rates in the 5-6 range vs being in the low 4s for conventional financing. If you purchase the property in cash, and you are hoping to cash out of the future appraised value, you must wait 12 months after purchase if closing in LLC with portfolio lender. We could get 75 % of purchase price right alway. If on the other hand, you are going with conventional loan (after quit claim deeding the LLC off title and adding your name for 6 months) then we can cash out 75% of the appraised value vs having to wait 12 months to cash out 75% of the appraised value with a portfolio lender that closes in LLC. Ask anything. Happy to help. Jim Blackburn

Ephryn, Hi! Nice to see you.. One of the best ways a new investor can get started, in my opinion is by purchasing a 4 unit property as their very first purchase. Volusia County ... Here the county loan limit for a 4 unit property is 530,150. That enables you to buy around 550k with just 3.5% down payment. That's about 20k. The seller can cover the closing costs & escrows. Plus we need to have another 3 months in reserves. Call it 9-12k.. So all together you need about 32k total saved right now. We live in one unit, and rent out the other 3. In some cases the rents from 3 may be enough to cover the living expense in unit we live in. In most cases, the rental income will make our cost of living in our unit much cheaper than it ever would be if we bought our own condo or single family house. This is an FHA loan. Typically you can only use FHA one time. Unless you have a really good letter of explanation that details the reasons why you are moving out of your current primary and into a new house using FHA a second time. (Ie. having a baby, moving to other side of town for job, etc.) If the exception is granted, then we get to use FHA twice allowing us to control more real estate with only 3.5% out of our pocket! Where many investors make a big mistake, is buying single family or condo first... then trying to acquire a 4 unit later. It's much more difficult to convince the underwriter that you are moving out of a comfortable private space , and into a building shared with 3 other families. Then you are stuck putting down 25% to acquire that 4 unit as investment VS the 3.5% FHA as primary residence. Long story short.. by purchasing the 4 unit as your first property, you're able to acquire, control, and benefit from the appreciation of 4 units with just about 20k down (3.5%) vs about 115k down payment (25%) laters. How long would it take us to save up 115k? Plus when you buy it investment you also need 6 months cash reserves as well.

Katrin Willoughby HI! Glad to see you. Ask your realtor to go on the MLS and provide 3 different addresses that should have been used for comps instead. (Sometimes appraisers are really busy or just a little lazy and miss comps that should have used to provide a favorable value.). If you can't find different comps with higher values, then you could look for errors in the adjustments like incorrect bathroom or bedroom counts or square footage inaccuracies. If there are no other comps, and no inaccuracies/errors, then you have 3 more options. Option A – Buyer pays the difference. Down payment increases by the value shortage. You will have to sign a letter indicating that you understand you are buying a property for less than the appraised value. (Value is subjective.) Option B – Purchase price is reduced to appraised value. Option C - Buyer/Seller split. Purchase price is reduced by half the difference of purchase price and appraised value. Option D – Cancel the deal. Ask Anything. Happy to help. Jim Blackburn