All Forum Posts by: Mark Alexander

Max FHA loan limit is $345,100 in Miami-Dade. I work in the mortgage business down here. Market is super high right now; check out some bank repos maybe. The issue with south Florida is that the prices are very high compared to market rent and it's hard to cash flow.

David Fernandez is right about Miami. People are holding $600 car payments with $3000 monthly income haha. Maybe that is why my estimates are a little over drawn. But in reality, I didn't include vacations, credit card interest, and let's not forget "South Beach Clubbing lol", etc. The point of this is to get others opinions from all different locations on their take with the market condition. It may not crash, and it may just take a dip. No one knows to be honest. For my personal case, I am saving up for my first investment house hack purchase and I would rather wait another year and buy a low market than to buy now at high value. Just my opinion.

Originally posted by @David Fernandez:

@Mark Alexander market cycles are hard (impossible?) to predict. RE is a long term game for me, I don't do flips, at least is not my intention although sometimes it happens. If you have a long term view for your RE investments, you can invest in RE any time as long as:

- you have a good personal financial situation that will allow you to carry your property if things go south (have reserves, don't empty your bank account). 

- the property will cash flow or, at least, break even in a worse case scenario. 

- you still have or can save capital and have access to financing if there is a crash. You really want to buy then. 

Now, I notice you are in Miami. I live in Miami too. The market is weakening (especially condos) and I'm not investing here anymore. Not all markets are the same, thus you will receive many different answers. Miami real estate market is too volatile, the spread from the top to the bottom is bigger than in other markets.

 I couldn't agree with you more. My views are definitely long term and if you have reserves you should be fine. My post was geared more to the average home-buyer, not investors. Send me a direct message; I would love to connect and get your take on the South Florida market & share a few ideas I have.

Originally posted by @Hersh M.:

@Mark Alexander Why student loan debt is 0 on left side in the pic? DTI should account for that, right? I do agree on increasing credit risks in the economy. Interest rates have recently gone down in spite of FED trying to raise them, that might help borrowers kick the can down the road.

 Fannie Mae just announced yesterday, for conventional financing, you go off of the payment on the credit report. In a lot of cases that is $0 due to a deferred payment or a payment structure worked out with their employer. It varies case by case. They also announced that you can roll your student loans into a refinance if you have enough equity.

Originally posted by @Account Closed:

@Mark Alexander 

Markets are always local. 

Subject To Works in All Markets. 

Mortgage Brokers lost jobs big time in 2008. 

The country is $200 Trillion in Debt. A correction has to occur. 

Why is being underwater on your mortgage a problem? You bought the house to live in, not to gamble with. 

I’d look for a backup source of income, like investing instead of assuming being a mortgage broker will always be there for you.

I couldn't agree with you more Ken! I always have some back up sources of income just in case, although my goal right now is to begin my REI career. I will be pulling the trigger on a house hack with a year; in the meantime, self education & saving more is key.

Andrew Johnson sorry for the miscommunication. This is for a conventional, 5% down. Normally you can't extend more than 46.9 DTI on the back end. I used Fannie as an example because of the new student loan guidelines put into place today

Let me start off by saying that I am no means making an excuse to not invest in real estate. I am actually looking to make my first purchase (house-hacking) within the year. Here is what triggers me though:

My full-time job is in the Mortgage industry, and on a daily basis, I see home-buyers getting themselves into loans with little to no money down leaving them with barely any equity in the property. In my honest opinion, I believe that we are in a personal debt bubble (credit cards, student loans, car loans, etc) because of people over extending themselves credit wise. 
Let me show you an example:

Average Joe wants to buy a home for $200,000 putting 5% down:

His income Pre-Tax is $4,200 monthly ($50,400 annual)

The column in the picture on the left represents how mortgage companies qualify somebody for a conventional loan - in this case, Joe's max Debt-To-Income ratio is 46%. On the right however exemplifies Joe's real life monthly expenses vs his AFTER tax income leaving him with a Debt-To-Income ratio of 122%! (Sorry for the bad handwriting!)

If a market crash is upon us and home values see a major decline, my worries are that myself, along with many others are going to be underwater on their mortgages. Is now a bad time to buy? Or does if you find the right deal under market value, should you be safe?

I don't say this to scare anybody or drum up drama, I simply want to know others thoughts on buying in today's expensive market with little equity.

Cheers!

@Account Closed Would love to connect and bounce some ideas off you! When are you coming into town? I think house-hacking will be my first move as a home-owner since I have zero experience in property management, repairs/rehab, etc.

Hey guys,

I'm looking for like-minded REI in the Miami-Dade/Broward/Palm Beach area. I am 21 years old, work in residential Mortgage lending, traditional (Conv/FHA/VA) & hard-money, and want to connect with REI that can guide me properly on my first Multi-Family purchase (House-hacking OR BRRRR).

Hey man, congratulations on your story! I was just reading through your blog posts on your website and wanted some insight/guidance on my first investment property. Ideally, my goals to get started are long term holds with positive monthly cash-flow and gain the power of compound interest. I am currently 21 years old, renting and could see myself house-hacking a multi-family and rent the other units. With an FHA loan, 3.5% Down, I am able to use 75% of the rental income towards qualifying. My issue is, I am a student, graduating in May currently working in the mortgage industry. Since I am a commission based employee, I doubt my income will average enough to qualify. I could go with a hard-money/BRRRR route, but I can not project my income for next year to be able to safely determine refinancing into a conventional loan. I have saved up around 12k for down payment/closing costs. Please let me know your thoughts and advice for my first purchase.