All Forum Posts by: Kevin Romines

It would be the same as far as paying down the HELOC's or stacking cash. However you wont gain much interest on the stacking of cash, but you will reduce the interest owed on the HELOC's. So the better choice is to pay down the HELOC's. It is equity you can access again when needed. The only down side risk is if the economy takes a huge crap and they shut off the HELOC's again like in 2008. At which point having stacked the cash is a safer bet. The odds of that happening are slim to none though, but anything can happen and no one has the ability to see what may be coming? Odds are though, that paying off the HELOC's is better choice with better benefits. God, I sound bi-polar!!!

I hope this helps. 

It sounds like the priority of things is 1.) Keep the home in the family in some way. 2.) Compensate the siblings as much as possible? 3.) Build and ADU to help with the rents to cover a mortgage that will be taken out. Short term is out, so consider a long term tenant type situation and decide if an ADU will still pencil out?

That said, the one sibling that will take on the loan should only finance it up to the point of comfortability regarding the monthly payment. Give the siblings what can can be given at that time for their percentage in the home up to the percentage of the loan amount that is taken out. The sibling that takes out the loan, is the one that owns the percentage that the loan went up to versus the value. The siblings that received some cash, will the still own 1/3 of the remaining equity in the home. The sibling that took out the loan and paid the other siblings off for a portion of their percentage will own that full percentage of the home plus 1/3 of the remaining percentage. The agreement is that at some future date, the siblings will be cashed out of their remaining percentage, leaving the one sibling as the sole owner of the home. 

based on the scenario you laid out, this is the best solution I could come up with that does its best to satisfy your criteria?

I hope this helps. 

Try Pen Fed Credit Union. They are great with HELOC's for rentals. I'm not sure if they will do a 3-4 unit that is owner occupied, but they will be your best shot?

I hope this helps. 

As a lender, here is my priority of loans to consider when talking about rental properties.

1.) Conventional Loans - These give you the best terms available, avoid mortgage insurance if at all possible.

2.) A full doc Non-QM loan. Full doc will get you better rates than a DSCR and higher LTV in most cases

3.) DSCR loan - Use these when debt ratio is an issue if trying to qualify via a full doc loan. Can go as high as 85% LTV on Single Family

4.) Commercial Loans - Some of the features here are close to the same as Non-QM and they will also do 5+ units, commercial, industrial and development loans. 

I hope this helps?

On your first few flips, don't get into heavy rehabs. Do a deal that doesn't go so deep on the rehab side of things. Look to hit a single or double, not a grand slam home run. Its your experience as you go that will get you that occasional grand slam. If you have any real estate now, look to get a HELOC so you have a tool to use for down payments and closing costs. The best thing about a HELOC is there are no monthly payments when the capital is paid back, but it is cash that can be deployed in a matter of minutes.

In the fix n flip world, you need to move fast, so fast closings will win you more deals than a 3-4 week closing. Being able to have that down payment and closing cost money ready to deploy will win you more deals. Money is made in closing a deal to rehab, then resell, so the faster you are in those areas, the more deals you have a chance to get. 

I hope this helps?

Land and lot loans are different than development loans. I would assume the lenders would look at this as a development loan. The best places for land and lot loans are Credit Unions. However I had a couple of lots I needed to pull off hard money to a perm loan and found that most of the credit unions will only do lot loans in conjunction with a purchase, not a refinance. In this case it would most likely be viewed as a refinance. So a few phone calls and they should find a home for that.

Development loans max. out at 50% in the hard money would, but credit unions should have more favorable lending terms on that?

I hope this helps?

Renofi is not the actual lender, they are basically a broker, which is not a bad thing so long as they have a program that can work for you. You are correct that a typical HELOC or other loan, will not take into account the ARV or after repair value. They will only go on what value is today. So if they have a program that will consider ARV and you need the additional value to get the loan needed, then yes, that is good program to consider.

You also need to consider what your exit from that loan might look like. Meaning, do you want a higher interest rate 2nd hanging around for years to come, if so, no worries. If not, you will need to do a cash out refinance to consolidate your existing 1st and 2nd into a new lower first mortgage. Timing of doing that cash out refinance will be important to you to get the best rates at that time. So with current economic conditions (rates are elevated and going higher) you may need to wait for 1-3 years to catch rates at a better point. So something to be prepared for. 

I hope this helps?

Some HELOC lenders underwrite to Fannie / Freddie guidelines even though the loan is a HELOC. others don't. This would just be a situation that you need to discuss with all lenders offering a HELOC to nail down the lender that doesn't have such a restrictive guideline. The loan you are looking for does exist. The best places to get HELOC's is credit unions. Best priced and most flexible as their guidelines are different than banks.

I hope this helps?

FHA only requires a 2 year work history in general, it doesn't all need to be in the same field. FHA will allow you to get a loan at the time you are getting a new job and you will just need to show 30 days worth of pay stubs prior to closing the loan. However different lenders have overlays, meaning that lenders guidelines are tougher or more restrictive than FHA. So ask the person that is doing the loan if their company has overlays on the FHA guidelines. If so, do they have one regarding how long you must be working before they will approve the loan.

I hope this helps?

I get what you are describing but the way that you would need to go about it requires a seller to be able to and also willing to play ball. This will be much harder to find than a hard money lender that will give you the rest of the money required for the acquisition as well as the rehab funds. To limit your down payment, the seller can carry back a 2nd behind the hard money lender and the lender may allow a smaller down for you due to the seller limiting the hard money lenders exposure or LTV.

I have a hard money loan that I'm closing next week where the sales price is $700,000 and the seller will carry back $275,000 and because of that the private money lender only wants $20,000 from my buyer as a token skin in the game move. Its workable and do-able. Go get it!!!

I hope this helps.