All Forum Posts by: Nate Jenks

That is a very good point, and it would be using it in that same advantage. The house I am looking at is a private sale from an older family friend moving into senior living (discounted). The home has great bones, but needs a cosmetic flip. I’m planning to live in it, and fix it up over a year or so. May be worth the extra cash on hand and leaving it in the deal. 

 Wow. Yes, that makes a lot of sense now. Thank you very much for the breakdown. That helped immensely and will be a major consideration for me!

 Hi Brandon, I am also learning to analyze properties. I would also love a copy of the spreadsheet. Thank you!

 Hi Patrick, thanks for the message. That is very helpful. I hadn't thought about additonal terms that could lead to complications when turning the home into a rental. Thanks!

 Hi Andrew, thanks for your reply. I think this is what I was inadvertently concerned about (super newbie). Just to confirm, does this mean I can only pull out 80% of the equity that is available after the rehab? With putting down 1%, I would have less of the downpayment going towards equity, so less downpayment being able to be pulled back out?

This is a major holdup in thought for me. I'm planning to do a 3.5% FHA on this first single-family, I'm not sure if that would make a major difference than the 1% down when it comes to equity after 1 year.

 Hi Dan, thanks for your response. It is important to consider the closing costs. That slipped my mind when reading the details. 

I have also been questioning the cash-out refinance rate. I've been trying to determine if the 1% down payment would hurt me in a BRRR (higher monthly mortgage rate and theoretically less to pull out in refinance). Do you find that lower down makes it harder for a successful BRRR? In recent episodes, it seems that BRRRs have become harder and harder to pull off with narrow margins.

Hello all. This is my first post on Bigger Pockets as I get going into my real estate journey. I'm currently in the market to purchase my first home (currently in an apartment). I'm looking to acquire my first BRRR. I'm a firefighter, and a family member recently showed me a "First responder loan" offered by a local credit union. I wanted to see if I could get some input on it since I had assumed a 30-year fixed would be the way to go. I posted the loan details from the CU's website below.

Are there any pros or cons when looking to pull out equity in a year or so to go on to the next project? It seems the initial APR may be lower than fixed, is that correct? The major pros that I note is a 1% downpayment with no PMI. any insight would be greatly appreciated.

Summary: Portfolio product with 1% minimum down payment and no PMI requirement designed to benefit those heroes who serve and protect our communities. Financing provided through this program is only available for properties located in Michigan or Florida.

Available Product Type: SOFR 7/6 ARM, SOFR 10/6 ARM

Loan Amount: $766,550 Maximum

LTV: Purchase and No Cash Out Refinance - Maximum 99%

Prepayment Penalty: None

Loan Assumption: None

Eligible Properties: 1-unit dwellings, attached and detached condominiums, PUDs

Escrow: An escrow account must be established for property taxes, and flood insurance, if required

Underwriting

• No Private Mortgage Insurance
• Occupancy – Primary residences
• Minimum Credit Score - 700
• DTI – Max 43% (UW/Mgmt exceptions up to 50% with minimum 3 documented compensating factors)
• Student Loans – If in deferment, no qualifying payment required
• Down payment of 1% must be borrower’s own funds, while closing costs and prepaids may be gift funds
• Attached condominiums require a 10% down payment
• Eligible Borrowers – Protect and serve heroes are defined as employees of public or private education institutions, employees of medical and healthcare organizations, all first responders, and active or former military personnel.

Servicing: Retained