All Forum Posts by: Noah Wright

Seeing rates between 5.5 and 6.5 for well qualified borrowers these days, happy to walk through customized pricing with you!

Depending on the size of the ADU vs the main property, you would probably be looking at either a "heavy rehab" loan - or a "ground up construction" loan.

Quote from @Jacob Bremer:

Nice to connect! Yeah, I’d be open to this as well. Property A is at 3.4% interest right now so I don’t think I can reasonably cash out refi on this one. 

I totally understand you are hesitant to touch the 3.4%, but keep in mind you can always cash-out now, expand your portfolio, and refi down later. As the saying goes "Date the rate, marry the home" 

Quote from @Lea Ramirez:

Hey everyone,

I’m looking for some advice. I’m currently unemployed but have managed to save up about $90k that I want to use to buy a home. The plan is to live in part of the home…

Hi Lea,

Congrats on saving up $90k! That’s a solid start, and it opens up a few financing options despite being unemployed. As a mortgage broker, I’ve worked with clients in similar situations, and I’d be happy to guide you through this process. Here are some thoughts on the options you’re considering:

1. Bank Loan: It’s true that banks typically look for steady income, but a large down payment (20-30%) and good credit could help strengthen your application. If you have a co-signer with a stable income, that could significantly improve your chances. Banks might also consider potential rental income to offset mortgage payments, so documenting your plan to rent out the rooms could help.

2. Private Money Lender: Private lenders can be more flexible, focusing on the property value rather than your income. While interest rates are higher, they could work as a short-term solution to help you secure the property, and you can always refinance later once you have a steady income.

3. Hard Money Lender: These loans are generally used for short-term financing and come with higher interest rates and shorter terms. It might be a bit risky as a first-time investor, so I’d recommend this option only if you have a clear exit strategy, like refinancing or selling the property within a year.

4. FHA Loan: Since you plan to live in the home, an FHA loan could be an option, though documented steady income is required. However, FHA loans also allow non-occupant co-borrowers, so if you have a family member or close friend willing to co-sign, this might be a viable route.

5. Creative Financing: Seller financing or a rent-to-own agreement could work if you find a seller willing to be flexible. A DSCR loan (Debt Service Coverage Ratio) is another option that offers low rates, as these loans are based on the potential rental income of the property, However they are for investment properties only. This means if you're living in the home, you are not eligible for the DSCR.

Best regards, 

Quote from @Karl Johan Nyqvist:

Hello BP Community,

My name is Karl, and I’m an architect and real estate investor based in Europe. I’m looking to pivot my focus to the North Carolina market and would appreciate your insights.

I’m specifically in search of lenders who offer refinance loans tailored for non-U.S. citizens…

Hi Karl,

Welcome to the North Carolina market! As a mortgage broker specializing in non-QM loans, I’ve worked extensively with foreign nationals like yourself who are looking to invest in U.S. real estate. I can definitely help you find refinance solutions that fit your strategy, including options with shorter seasoning periods and up to 75% LTV cash-out refinances.

I have relationships with dozens of private lenders who cater specifically to foreign investors, all of which offer flexible terms that could align with your goals. Working with a broker like me allows you to navigate these options efficiently and ensure you get the best possible deal tailored to your situation.

If you're interested, feel free to reach out, and I’d be happy to discuss your project in more detail and guide you through the process.

Looking forward to helping you succeed in the U.S. market!

Best regards, 

Great questions! Here are some insights regarding the potential tax implications and mortgage process:

1. Tax Implications for Trustees: When the property is sold, the trustees may need to consider capital gains tax on the appreciated value of the home since it’s currently in a trust. However, if the home is inherited, the beneficiaries typically receive a step-up in basis, which can minimize capital gains tax when the property is eventually sold. It’s advisable to consult with an estate attorney or tax advisor to understand the specific implications for your family’s situation.
2. Getting a Mortgage for the Flip: Yes, the mortgage process for a flip would generally be similar to purchasing any property on the open market. You’ll need to provide documentation such as income verification, credit history, and possibly a property appraisal. If you’re considering financing renovations, look into renovation loans that cover both the purchase and improvement costs.

It sounds like you're making progress in navigating this situation thoughtfully. If you have more specific questions about financing options or renovation strategies, feel free to ask!

Best of luck,
Noah

This response provides clarity on Peter's inquiries while maintaining a supportive tone.

4o mini

Hey Zeek,

It’s great to hear about your experiences in Japan and your interest in investing in real estate there! You’ve made some compelling points about the market and your approach. Here are a few thoughts on your perspective:

1. Long-Term Holding Strategy: Your idea of holding onto a property for rental income instead of focusing solely on appreciation is a valid strategy, especially in a market like Japan's. Given your age and the time you have, building a stable cash flow can lead to significant wealth over time.
2. Understanding Local Dynamics: You're spot on about the unique dynamics in Japanese real estate, especially with the aging population. Your observation regarding properties being available due to heirs not wanting to manage them is insightful. Identifying those opportunities can lead to solid investments.
3. Demand for Affordable Housing: The points you made about the demand for older, well-maintained properties in desirable locations are crucial. As long as you focus on maintaining the property and keeping rents fair, there will always be tenants looking for affordability, especially in urban areas.
4. Financing Options: When it comes to getting capital, there are several avenues you could explore, such as local banks, international lenders, or even partnerships with other investors who share your vision. It might be worth reaching out to local real estate investment groups to network and learn more about financing options in Japan.
5. Learning and Growing: Keep educating yourself about the market and learning from others who have made similar investments. The more knowledge you gain, the better positioned you'll be to make informed decisions.

Your passion for real estate is inspiring, and I encourage you to continue pursuing your goals. If you have any questions or want to discuss specific strategies, feel free to reach out!

Best,
Noah

Quote from @Samuel M.:

I bought an out of state property and have about $50,000 left to pay off for the loan. Anyone know if paying 1 huge principle payment at the end of each year would pay it off faster verses bi weekly payments?

Hi Samuel,

When considering how to pay off a loan faster, both methods you've mentioned—making a large principal payment at the end of each year versus bi-weekly payments—can be effective, but they operate differently.

1. Large Principal Payments: Making a large payment once a year can significantly reduce your principal, leading to lower interest costs over the life of the loan. However, the impact of this method depends on how interest is calculated on your loan (e.g., daily vs. monthly compounding).
   
2. Bi-Weekly Payments: Paying bi-weekly effectively means you're making one extra payment each year (26 half-payments vs. 12 full payments). This can help reduce the principal more frequently, which means you'll pay less interest over time compared to just making monthly payment
   

• Interest Savings: Bi-weekly payments often result in more interest savings over time compared to a single large annual payment, as the principal is reduced more frequently.
  
• Flexibility: If you have a good year financially, making a large principal payment can give you flexibility, but it may not be as effective in reducing interest if the loan has high monthly compounding.

If you're looking to pay off the loan sooner and save on interest, bi-weekly payments are generally more effective. However, if you prefer to make a single payment due to cash flow considerations, that can also work well, especially if you can make it substantial. 

Simple answer: the faster you pay off the debt, the less interest you will pay.

Hey Dominique,

Welcome to the community! It’s fantastic to see you and your wife diving into real estate investing, especially in the Detroit market.

Detroit has some unique opportunities for rentals, and there’s a lot of potential for growth. Here are a few tips as you get started:

1. Research the Market: Get to know different neighborhoods in Detroit. Some areas may have more demand for rentals than others, so it’s good to pinpoint where you want to invest.
2. Network with Local Investors: Joining local real estate investment groups can provide invaluable insights and connections. You might find mentors or partners who can help you navigate your first deals.
3. Analyze Deals Thoroughly: Make sure to run the numbers carefully on potential investments. Consider not just the purchase price but also renovation costs, property management fees, and local rental rates.
4. Consider the Property Management Aspect: If you’re not planning to manage the properties yourself, finding a reputable property management company is essential to ensure smooth operations.
5. Stay Updated on Local Regulations: Familiarize yourself with rental laws and regulations in Detroit to avoid any potential issues down the line.

Feel free to ask any questions as you continue your journey. This forum is a great resource, and I’m sure you’ll find plenty of support here!

Best of luck,
Noah

Quote from @Jovanni Thammavongsa:

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $315,000
Cash invested: $85,000...

Hey Jovanni,

Congrats on your first BRRRR investment at just 20! That's impressive, especially with a small multi-family property. Your cash-on-cash return sounds solid, and it's great to hear that it's already cash flowing!

1. Investment Motivation: It’s smart that you’re thinking about tax implications. Real estate is an excellent way to leverage deductions and reduce taxable income. Have you considered any specific strategies for tax benefits in your next investment?
2. Finding Deals: Working with a local wholesaler can be a fantastic way to find off-market properties. Did you find that the wholesaler had a good understanding of the market, or were there any surprises in the deal?
3. Financing: Traditional financing is a great choice for your first property. Have you thought about how this might change with future investments, especially if you want to scale up?
4. Adding Value: Renovations can significantly increase your property’s value. What kind of renovations did you focus on? Any tips for others looking to maximize their investment during rehab?
5. Contractor Experience: Finding reliable contractors can be a challenge! It might be helpful to build a network of trusted professionals. Any strategies you used to find the right ones this time?

Your experience will be valuable to others just starting out! If you had to give one piece of advice to new investors, what would it be?

Thanks for sharing your journey! It’s always inspiring to see young investors making moves in real estate.

Best,
Noah