All Forum Posts by: Peter Vander Valk

I would highly NOT recommend hard money or DSCR for this. Hard money is more geared toward people who are fixing/flipping or fixing/refinancing into a purely rental property. DSCR is meant for people who can't qualify based on their personal income. First timers can use these, but these products have high associated costs and aren't meant for your primary residence.

For an owner-occupied primary residence that needs renovation, FHA 203(k) loans are the way to go at 3.5% down, or Fannie Mae Homestyle Renovation loans if you can qualify conventionally and have 15% or 25% to put down on a 2 or 3-4 unit property respectively. With these loans, you can borrow money toward the renovation and there is no refinance required. You can do a rate-and-term refi in 6 months or a cash-out refi after a year.

So long story short, if I were in your position, I'd look into the 203(k) loan. 3.5% down for a multifamily is a great way to get into house hacking your first property. I'm happy to chat further if you have any questions. Feel free to shoot me a message. And whatever you decide to do, best of luck!

Hey @Kevin Manafi, thanks for the shoutout!

Hey @Harold Pacheco, yes we have a monthly meetup in Bergen County. Next one is on 2/7/23. I'll shoot you a DM, I don't think I'm allowed by the rules to advertise it here.

Anyone else interested is more than welcome to shoot me a DM!

Hi Kevin,

Sounds like you might be looking for a bridge loan. These loans are typically held anywhere between 6 months to 2 years and are generally interest-only payments. You will likely need asset reserves as well, and your experience depends on the rate/terms/LTC. With a bridge you can also finance up to 100% of the renovation depending on the ARV. If you plan on holding onto the property to rent out, you can then look at refinancing into a longer term rental loan.

Best regards,

Pete

Hi Dan! 75-90 days for a cash out refi is absurd, as you mentioned. A refi should generally close in under 30 days, although it could go up to 45 based on conditions, delays in getting documents back, etc. You will also be looking at large margins with a big bank such as TD, and if this is not reflected in the rate you will usually be getting points/fees tacked on. I would be happy to go over your loan estimate with you if you'd like. Feel free to shoot me a message.

@Ivan Maldonado sorry to hear about that, and no worries. Hope you're feeling better.

Sure, feel free to shoot me a message anytime with any questions!

Hey @Ivan Maldonado, what @Joseph Guzzardi Jr is saying is correct, you can utilize 75% of the appraised rental income to qualify with 2-4 family. That being said, your debts are another factor in what you can qualify for.

As far as room rentals in a single family, I have known people who are successful around colleges. However, you can't use this income to qualify (this would be treated as boarder income which you would need to show on your tax returns for 2 years to qualify). So long story short, you will likely have more buying power with multifamily.

If you can get a cosigner, that's another option to increase your buying power, but you need 15% down FHA with a non-occupant co-borrower for multifamily.

Hi Christian,

As others have said, this could be possible. However, it would also depend on other factors such as your monthly debt payments and how much rental income the property could produce. In this market, just know that a lot of sellers don't like to accept FHA offers, so your offer won't necessarily be as strong as a conventional or cash offer. If you're persistent, though, there are places out there.

Best regards,

Pete

Hi Jared, welcome to BP! I'm always looking to connect with other NJ investors and real estate professionals. I am a mortgage broker in Bloomfield, NJ and my wife and I own a duplex in town as well. Best of luck with everything, and hope to talk to you soon!

Hi, Pravalika. Welcome to BP! You will find a lot of great advice here and meet a lot of great people. 

My wife and I own a 2-family house in Bloomfield. I am also a mortgage loan originator by trade. I am always looking to connect and talk real estate! Feel free to give me a shout if you have any questions or need recommendations for real estate professionals to work with! 

Hi Lauren,

Without knowing the full details of the transaction it is hard to say, but 4.8% sounds like it could be reasonable for this type of deal. The reality is, once you get into non-owner-occupied renovation loans and DSCR loans, you are looking at higher rates and/or points. In the lenders eyes, the fact that it is not your primary residence means that there is additional risk, which needs to be balanced with a higher interest rate. If you would like, I would be happy to review the loan estimate for you to make sure you are getting a good/fair rate.

Just a clarification, this could not be an FHA 203(k) loan unless it's your primary residence - this will be an investment property, correct?

Best regards,

Pete Vander Valk