All Forum Posts by: Phil Jones

Thanks @Joe Jor, that sounds like you had a similar experience, I shared that recommendation with them. 

And thanks for the referral @Nicholas Mann, I'll be reaching out. 

Appreciate all the help!

Thanks @John Bucci, I know they applied through some of the large corporate banks (e.g., Chase) and spoke to at least one mortgage broker in the city. That person told them that they would have a hard time getting a loan due to the income issue. I had run into something similar in the past and had success with a credit union, so I was hoping there might be something similar.

I appreciate you connecting them, I'll send you a message soon. 

Hi Everyone! A good friend of mine is looking to purchase a home in Westchester County after living in the city. They are having trouble getting a traditional mortgage (this will be their primary residence) because of how their income is structured as an independent contractor.

Their income is paid through an S-corp which was paying for part of their rent due to a home office and other expenses. Their salary draw was only a portion of the corporate income. As a result they are having trouble hitting the DTI requirements for GSE loans.

It's the kind of thing that a lender with the authority would understand, but Fannie/Freddie won't. I was wondering if anyone knew lenders in the area that might work with non-conforming loans, or if you have any other advice that might help them qualify for mortgage. FWIW the ballpark anticipated note for their mortgage will be the same as the rent they have been paying for the last three years, and they have sterling credit. 

I figured the BP community would be well positioned to answer this question. Any advice or referrals would be greatly appreciated!

Thanks for the great reply @Bill B.! 

I think the comparison of the tax savings to the rental income is pretty harrowing. That's something that I really need to consider. 

I don't really need the money out now, but I was considering redeploying it to other properties that might have better return.

So much of success comes from getting the most out of what you've got, and I'm just worried I'm not in this case of I hold that property for much longer. 

Thanks for the thoughtful reply @Will Pritchett! I agree, it is a good problem to have! The tax free gains are a big motivator, as I see this as an opportunity to get the equity out without the tax hit since I have been living there. 

As you say, I should probably get a better handle on what my overall strategy should be. I know I'm not too keen on hedging so much on continued appreciation in the Austin market. It's more speculative than I would like. On paper, I prefer the idea of the consistent cashflow as your strategy seeks. 

I appreciate your insight!

Hi BP! 

I have a home in Austin that I've been house hacking for a while. My tenants moved out and I am likely not going to be staying there. I figured at first I would rent it out, but once I ran the numbers I wasn't so sure.

The house has appreciated a lot (it's worth about 325K and I owe less than 60 on it) but my research suggests it would only rent for about 1800 a month.

While it would cashflow fine since I owe so little on it and my mortgage is low, it doesn't seem like a good return on equity. 

I'm not sure I'm looking at this in the right way, and I'm curious what others think.

Does it make sense to get such a low return on equity in hopes of more appreciation, or should I cash out and invest in properties with a better rent/price ratio?

Thanks in advance! 

Thanks for the great information everyone. @Chris Mason I was thinking I might have to do some more looking, but I wanted to know what had worked for others so I knew where to start. 

@Dan Schwartz My LTV is around 30% so some of those options might work.

@Bret Ehlers Thanks for the input on the tax implications... it's something I had not considered and definitely need to better understand before moving forward. 

Thanks again everyone!

Hello all!

I wanted to do more with my real estate investing, and I have a significant amount of equity in a home I bought over 10 years ago. I live in there part time due to work, and rent out the other two rooms. I recently purchased another home as primary resident in another city. 

I had an initial conversation with a loan officer at a local credit union about getting a HELOC or loan on the first house, and she asked me if I had tenants. When I told her I did, she said that property was ineligible for a home equity loan because it is considered an investment. When I asked her if this policy was specific to their bank, or if it was a law, she said it almost all underwriters will stop the loan. 

I've heard many people on BP talk about using refinance and home equity as a source of capital for investment, and it might not have been as easy as I thought. I'm curious to see what your experience has been and how someone can go about getting equity out of an investment property. 

Thanks in advance!

TL;DR: Tried to get home equity loan on investment property, was told it's not possible to get home equity loans on investment property. 

Thanks for the warm welcome @Michael S., @Chris Sweeney, and @Luke Miller There is certainly a lot to take in. 

Lucas, I appreciate your offer. I'll definitely take you up on that! But as you say, finding that deal might not come easily. I'm going to try to keep my options open, but I'm going to have to get creative to find a BRRRR deal!

Hi Bigger Pockets People!

I'm a single father, a consultant by day, an aspiring real estate mogul in Kingwood TX (Houston) and Austin.

Through the insanity of the pre-collapse mortgage lending, I bought my first house in Austin back in 2003 when I was 18 with no credit. I wanted to have a place to live while I was in college. I lived in one room and rented out the other two to cover (mostly) cover the mortgage. I guess I was house hacking before it was cool.

Work has had me moving back and forth between Austin and Houston. Since my daughter is in Houston, I spend most of my time there, and recently bought a house here in Kingwood where I live with my girlfriend.

Ever since buying the first house in Austin, I've wanted to invest more seriously in Real Estate. But I always found excuses: too young, too little income, too little certainty. I've realized it's time to get over that. I want to build some wealth for my family, and starting earlier would be better.

From my day job, I love doing forecasting and projections, so I think that’s something I can help people with? I hope it will add to my abilities as an investor. I've traditionally been risk averse, but I'm willing to take managed risks when I've done my homework, and my Excel and forecasting skills help me feel more confident about making those projections.

My plan, as of now, is to go the BRRR route with single family homes in the Kingwood/Woodlands area of Houston. I would do Austin, but that market has probably priced me out at this point. My SMART goal is to have 8 cash flow producing properties within the next five years, and to take as much advantage of the low interest rates as possible.

As for being a member of Bigger Pockets, I'm hoping to:

• help people with whatever skills I can (maybe forecasting?)
• connect with like-minded investors and professionals
• Learn as much as I can!

Looking forward to being a part of this great community!