All Forum Posts by: Jesse Hinaman

@Brian Kohtz

It’s funny, you listed all those different real estate careers, but most people overlook the best one of all…residential mortgage lending. By far the most flexible, as you can work from anywhere with a laptop and cell phone. You can be licensees in as little as 3 weeks, and if teaming up with a good team, can be making 6- figures in your first year, and usually double your income each year after.

It’s even much more lucrative than what real estate agents make.

Lastly, it’s much valuable knowledge to a real estate investor to understand the numbers, Loan guidelines, income docs.

Don’t get me wrong, real estate agents have a hard job, and I would never cut it as one. You play therapist and marketer more than anything. Your nights and weekends are shot and you’re glued to your local area. No extravagant travels and working from Miami Beach or Maui.

@Kevin Dubina You don’t need to worry about interest write-off. If it’s a primary home, you’re better off taking standard deduction since you’ll have such a low loan amount. At which point, interest write-off is irrelevant.

If its investment property, you get to write off 100% of expenses. Interest deduction rule does not apply on investment properties.

All depends on current rate. I have clients that purchased less than a year ago and were dropping their rate from 3.875% to 2.8% with no buydown. The break even point is less than 2yrs with that big of a drop.

Also, you can look at a refinance as an equity advance. With 2 months no mortgage payment, and If you have impound account with old lender, that can equate to sizable amount of cash back. For example, with $400k loan amount, you’d get close to $10k back...but you increase your loan amount for about the same amount, so it’s equity advance.

@Richard Hayes few things you need to keep in mind for the lender. If buying a 2nd multi family property, you’ll have to show a certain amount of reserves to the lender, in addition to downpayment funds. Proceeds from cash-out refi can 100% be used toward down payment on new purchase, but cash-out proceeds cannot be used to meet reserve requirement. With that in mind, it is very beneficial that you already have a $40k reserve set aside.

After the property is transferred into your name, you’ll need to wait 6 months before you can complete cash-out refi. A work around to avoid seasoning requirement is to have your dad record Lien against the property, then you can refinance without waiting. Lender will pay off your old loan (your dad), and your dad can transfer the funds back to you after closing. This is also considered rate/term refi which gets you better interest rate than cash-out refi. However, This strategy won’t work if trying to do simultaneous refi and purchase (you’ll need the funds transferred from your dad to sit in your bank account for 60 days, since gift funds can not be used for investment purchase).

@Jacob Dawson I would highly advise against your internet rate trolling recommendation, unless you want to get spammed by hundreds of call-center LOs. Always work with local mortgage broker that has access to the 100s of banks (like rate.com) who also doesn’t charge you to search and find the best value lender for your scenario. You get same rate, expert advice and service, and someone who’s advice you can rely on as you continue to expand your portfolio and need advanced mortgage planning strategy.

Unless you like being bombarded by numerous unwanted solicitations, having your credit pulled 3,4,5+ times (Mortgage broker pulls it once and shops for you), and working with a call-center internet service rep who just got their license a few months prior and has 0 time to coach/guide you.

It’s always shocked me how decent earning young professionals who rent don’t leverage they’re ability to qualify for home as a primary or 2nd home. Even if they don’t want to live in Suburbs. You can always rent out part or the whole house and still rent yourself somewhere else. I think the biggest misconception by younger adults is that the house they own in some way shackles them. When in reality it’s the exact opposite, as it springboards they’re future retirement.

If I was young millennial renting in California, I’d buy in a low cost suburb out of state as a 2nd home. $120k home would only require 10% down ($12k), lock in 2.9% fixed interest rate. Could rent it out, or move to it later on if wanting to switch to new scenery.

I believe as more of our gig economy professionals realize they can live anywhere, they will start using this strategy until they can fully transition they’re work to full time remote or join gig economy.

VA rates have hit new historic lows!! 2.25% for 30yr fixed.

If you weren't aware, VA offers a streamline refi option called an IRRRL (interest rate reduction refinance loan) that requires no income verification or appraisal, and property can currently be an investment property and still get this reduced

VA rate (as long as property currently has VA loan in place). They also apply huge cut to the VA funding fee (only .5% vs the normal 1.6%).

If your a veteran in California Bay Area, Sacramento, or So Cal you should be leveraging the VA benefit to propel your investment strategy.

@Dale Miller not sure who you’re talking to, or if these are really inexpensive properties (under $100k value).

I’m doing a deal for a client purchasing new primary and pulling cash out of existing primary and converting to rental. 2.92% fixed 30yr on new primary purchase, and cash-out refi on old primary (now considered investment property so I can give him income credit for 75% market rent) at 3.5%. Loan amount needs to be at least $125k+ to get better rate options.

@Emery Taber 15% interest rate is annualized. So your calculation should be $15,000/12 months.

Seasoning period for Cash-Out refi is 6 months. You want to make sure hard money loan doesn’t have “Pre-payment Penalty” Within the first 12 months.

Secondly, if just wanting to pay off the hard money loan, you just need a rate/term refinance. This has no seasoning requirement.

@Jimmy Au need to know loan balance you’d like to pull out to be able to intelligently answer your question regarding tax benefits. Also, what’s your filing status (single, head of household, married filing jointly).

With the doubling of the standard deduction, itemizing your interest is not as valuable as it use to be.

@Angel Garibay Just saw your house details and you’d eliminate MI.

You do want to be careful on how you structure this to allow you lowest possible rate, knowing your buying new primary.