All Forum Posts by: Paul Crosby II

Quote from @Kristen L Garner:

Hi Vincenzo, There are DSCR products that could lend well to your scenario. You would need to provide a passport photo and 2 months bank statements from any account you would be using to pay down payment, EMD, or closing costs with. DSCR products qualify you based on the property itself cash flowing. Depending on what a credit pull does or doesn't show for you, you may have to come in with an extra 5% down vs. the normal 20% down. Feel free to DM me if you'd like to chat about some of the product details and guidelines. Best of luck!

This is easily the most comprehensive answer you could get and would be the best way to purchase a property as an Expat.

I would also suggest talking to a real estate attorney and tax professional to make sure you are properly structuring your real estate business to minimize your tax burden. LLC  and management company setup will be crucial

Hi John.

It really depends on how recently you received the gift.

Typically lenders request bank statements for the past two months. Anything received before that period is already part of your bank balance so they usually dont get digging beyond that.

I work with a company that allows gift funds for DSCR loans however whether that is allowed or not varies with each lender. IRS guidelines would require you to seek out a tax professional but i believe you are taxed on gifts above $14k.

 I would suggest having an attorney on standby as well. 

An LLC is nice but you should have documentation and process around member duties, how to liquidate one's ownership and how you will exit properties to name a few.

Quote from @Ryan Tongue:

Quote from @Paul Crosby II:

Fannie Mae has a guideline that if the Authorized user account has a significant impact on the credit profile (i.e that is where your score is coming from) then it requires Lender to either make the case that it isnt or proceed with non traditional credit (4 utilities paid over 12 months).

In terms of building  your credit score,  I would be strategic about building out a more complete profile.

Installment credit- Self Lender, experian boost or a secured loan are great for this. Credit unions and Huntington bank will do a small no credit loan if you have deposit history that you can use for this.

Revolving- you already seem to have this but you can boost it Tomoboost or Stellarfi since they use your bills to build you a revolving credit line up to $30k. Larger personal limits create stronger profiles

Auto- Technically this is also installment but i usually suggest my clients have a car loan or lease for 1-2 years before paying it off so this can build your profile.

Other than mortgage, these are the categories your credit history get divided into when we pull a credit report

Hope this helps. Everyone above is giving solid tips as well

Hi Paul,

Would you mind describing a little about what installment credit and revolving credit are? I apologize but I'm fairly new to these terms and after giving them a google I get very broad statements and am not quite sure how they'd apply to me. Specifically:

Installment credit: I see that this is borrowing from a lender and paying back the loan over a fixed amount of payments, or installments. How could I use this at my current stage? It seems like an umbrella term for all sorts of loans.

Revolving credit: If revolving credit is a line of credit that stays open (i.e. once I pay off the balance I can instantly use the money up to the credit limit again), how would this be useful? And what do you mean when you say that I already seem to have this?

Thanks so much for you previous input -- it would be great if you could also clarify these things if you have the time.

Best,

Ryan

Hey Ryan,

I dont have access to your credit report but I am making some assumptions based on the lender's reaction.

If you already have installment credit (via Student Loans or other loans) then this aspect of your profile should be pretty solid.

You seemed to already have revolving because you mentioned you are an authorized user on a credit card and you have your own. Revolving means that you can access the credit, pay it off and access it again.

The goal of my post was to focus you more on credit profile building rather than just getting approved for the loan. 

Diverse borrowing history (the different types of loans) and quality of accounts(A+ issuer like Chase and large limits over $10k) will help build a strong and healthy profile that will allow you to get approval for loans and make your score

Absolutely stay an authorized user as this is likely giving your alot of payment history and driving the average age of your accounts way up.

Hope this helps and if you want to talk through it some more always down for a chat

Fannie Mae has a guideline that if the Authorized user account has a significant impact on the credit profile (i.e that is where your score is coming from) then it requires Lender to either make the case that it isnt or proceed with non traditional credit (4 utilities paid over 12 months).

In terms of building  your credit score,  I would be strategic about building out a more complete profile.

Installment credit- Self Lender, experian boost or a secured loan are great for this. Credit unions and Huntington bank will do a small no credit loan if you have deposit history that you can use for this.

Revolving- you already seem to have this but you can boost it Tomoboost or Stellarfi since they use your bills to build you a revolving credit line up to $30k. Larger personal limits create stronger profiles

Auto- Technically this is also installment but i usually suggest my clients have a car loan or lease for 1-2 years before paying it off so this can build your profile.

Other than mortgage, these are the categories your credit history get divided into when we pull a credit report

Hope this helps. Everyone above is giving solid tips as well

Quote from @Daniel Vanhala:

Quote from @Charles Carillo:

@Daniel Vanhala

Using a credit card might be your best bet. Many cards offer a low rate for the first 12-18 months.

Thanks! Do you have any specific cards in mind?

 I know Wells Fargo has a 0%, 18 month card.

Here is a list of cards if you need the link

In the future if you are going this route, you should build a relationship with a credit union. They would be able to see your deposits and likely extend a personal loan or make exceptions.

Welcome Heather!

Thanks for this post as i need to build up my team as well.

Should you need to utilize DSCR or an investment property HELOC i can help as well

I would say first to see if you can get a credit line increase as the cause for the drop is your utilization. If you could get up to $50k it should bring you below the 30%

Double check the Chase Ink Card agreement. If it does not say they would personally report, i would dispute and say the debt is not owned by your personally.

Hi Sarah,

Congratulations on your first deal!

When you say "sell" can you include ARV(after repair value) and what comps you used in the neighborhood to come up with that value?

It would also help to describe what exactly is being rehabbed, what the current property condition is and how much money you are willing to put into the deal( most HML require 20% or cross collateralization

This is from my experience working with HML as I have a few underwriters i work with, hope this helps 

Welcome!

Definitely lots of great resources on BP, BP podcast and BP YT if you are ready to drink from a firehose!