All Forum Posts by: Jason Risley

Thanks Albert! I got a HELOC with Realtor Federal Credit Union in February of 2016. They counted the leases I had even though they weren't on my 2014 tax returns (being 4 were purchased in 2015).

Hi Joe, Are you fix and flipping the 3 homes that you are rehabbing or renting out after the rehab projects?

I live in Lake Forest off of Jeronimo and Bake and the Round Table is close by so maybe I'll swing by this week.

Thanks Chris!

My 2015 tax returns won't be able to be filed early this year. I have several docs from corporations that don't get to me until March of every year that need to be included on the personal tax return.

I found that the National Association of Realtors has a credit union. Or they are affiliated with Northwest Federal Credit Union. Currently, they say they can use leases for homes purchased in 2015 to help with DTI. I just submitted the app there so hopefully it goes okay.

Hey Chris,

Thanks for the info! I called TCF today and they said they don't work with consumers directly in CA, but that you have to work with a mortgage broker. They asked if I knew a mortgage broker and of course I do. 

I'm open to working with you, but can you check and see that they don't require 5 years of seasoning on all short sales? I only have 4.5 years of seasoning on my short sale (Aug. 2011).

Jason

My primary residence is worth between $775K and $800K. I'm a realtor so that value should be very close to accurate. I have a first loan at $384K and I'm looking to get a HELOC (home equity line of credit) for between $150K and $200K which would still keep me below a LTV of 80% pretty easily. Seems easy, right?

Hurdle 1) I purchased 4 rental homes between August of 2015 and November of 2015. The homes all cash flow positively. Here's the hurdle by using 1 of the rental homes as an example: Home purchased August of 2015 has rental income of $3,300 per month. PITI is $2409. That works as cash flow positive. I got rejected on a HELOC by a credit union because they will see the $2409 in expenses on my credit report, but they won't look at a lease agreement, but will only take income from my tax returns which 2015 tax returns aren't out yet and 2014 tax returns won't show a home purchased in 2015. If you multiply these scenario by 4 homes and I can't use any rental income, you can see why my debt to income ratios would be out of whack unless the HELOC will consider the rental income off these homes. To me, if you can count the debt that started 8/21/15, why can't you count the income that started 8/21/15?

Hurdle 2) I had a short sale on a home in August of 2011. Fannie Mae and Freddie Mac require that it's been past 4 years, you can get a home loan. I am past 4 years, but some lenders follow Fannie/Freddie and some of the places that I've talked to have their own overlays which are more strict than Fannie/Freddie.

Any credit unions or other places that might be okay with these 2 hurdles?

I used Rick Miller of True View Inspections a couple weeks ago. I thought he was great!

The 30 year average for California Real Estate is 9%. I know you don't know, but if you had to guess...what percent would you use for CA for the next 10 years? next 20 years? next 30 years?

Some initial thoughts...

1) Excessive lending contributed to a bubble in the last couple years. However, if we take out the bubble years that were contributed to by lending and also pent up demand from the early 90's, and just look at 1976 to 1990, the average is 11% so even without the excessive lending, this 9% seems to hold close.

2) Sadly our society today and in the future has a much much higher divorce rate. This contributes to potentially 2 homes today (kids having bedrooms at each) vs. one home 15 years ago. More demand.

3) A number of Baby Boomers who have prospered in a great economy and have done well for themselves will want and have the resources to move away from cold winters and humid summers for California in retirement.

4) Population in the world, United States, and CA continues to increase with more people...same amount of land. In CA, most land especially in desirable cities is mostly built out and I have yet to see land growing off the coast. Does that make the land more desirable based on supply vs. demand?

5) International buyers continue to buy in CA, NY, Florida, etc. rather than middle America...generally speaking.

Okay, if you have time on your side....then appreciation should be considered. I understand positive cash flow is nice especially in the short term, but appreciation must be considered as well if this is a long term hold.

Let's face it...everyone has to live somewhere..so when people are buying houses, the demand causes prices to increase and when people are not buying and sitting on the fence, there are more renters out there...so rents will increase because of supply and demand. If the 5% appreciation does not happen....and the next 5 yrs are lower than that....well, that means the lack of buyers are all in the rental market...too many renters means that you should be able to raise rents quickly.