All Forum Posts by: Muhammad Patel

So for several houses I've looked at that need work I'll ask the realtor and they will say "can you buy it in cash?" when I say no they will respond that I will need cash, or a 20% down payment for the loan. Is this really the case?

No. It depends what is your intent. If you want to buy for primary residence then you can use Homestyle loan for conventional or 203k for FHA. For investment purposes it is a different story. You can get a fix and flip loan and then transition into a DSCR loan. Yes in the investment scenerio you will need more down payment.

2 Votes

Quote from @Andrew Postell:

@Muhammad Patel yeah, this just sounds like he's not working with the right lenders. Now, maybe the home won't appraise high enough but a standard renovation loan will go off of the ARV for the property. So, the improved value will be used. However, if your client needs $5million to make the property worth $3million....then no lender will give him enough money. But if he needs another $1million and that will make his property work $3million, then that should work. You just need the right lenders. You mention this is a "client" of yours. Are you a real estate broker?

Im a lender myself. The thing is after looking at his.plans he is planning of adding a brand new unit worth 2 million that would put the property value to about 3.5 million from 1.3 million. He owes 650k on it. Since this is also his primary home not investment renovation lender wants to touch.

0 Votes

Fort Lauderdale, Florida

Quote from @Andrew Postell:

0 Votes

Fort Lauderdale, Florida

Maria make sure you shop around for Citizens too. Every agent seems to have a different rebuilt cost in their system and their quotes varies, sometimes quite substantially.

0 Votes

Fort Lauderdale, Florida

I have a client who wants to do additional construction on his property worth 2 million dollars. He already has a First Lien loan of 650k on the property. He is trying to build another house on the property. He has all the permits and surveys completed. Are the any loan options for him. Currently his LTV is 50%. The conventional method will not give him enough funds to do it. HELOC would only give him quarter of the amount needed.

Any advice would be appreciated.

Thank you.

0 Votes

Fort Lauderdale, Florida

Quote from @Irina Belkofer:

@Brittany Minocchi I don't do DSCR - I have access to better rates and don't need that high closing cost - I'll need to keep this property for 5-7 years to break even.

I was talking to my broker about conventional loan for investment property.

It was easy to close in 2019 but not now. My rate was 4.125% with $4K total closing costs including title etc. Their origination fees was about $1400 which is really nice and no points.

Once I get back to 800 FICO with DTI close to 5-10%, I'll try to buy my next home.

As for the mortgage amount, it was $88K - down 20% and price of the house was $110K.

The rates you are giving, are they for conventional cash out refinance. The shortest way to increase you score is to do a cash out refinance and payoff your credit cards. This will increase your score to over 800 that you are looking for. Try doing a conventional cash out refinance. The rates are not horrible ( they are if compared to 2 years back ). Cash out refinance on DSCR will cost you more .

1 Vote

San Antonio, Texas

Quote from @Irina Belkofer:

@Brittany Minocchi banks don’t really want to and rates are around 9-10%.

I won’t refinance in couple years because I’m moving to another state - so all my houses will be sold anyway.

I asked my mortgage broker about cash out refi %%? and got vague answer….right now I’ve max out all my credit cards with 0% so next time I’ll be looking for cash out refi is in June 2024 - my score dropped below 700.

When it’s back to 800+ I’m going to buy my next home so I guess it’s not in my stars to do it…..however, I know people who are selling their rentals rather than get cash out of it - and mostly it’s because it’s hard to find a good lender to work with

0 Votes

San Antonio, Texas