All Forum Posts by: Ryan Muska

I agree with @Jesse Holsapple

Lots of lenders will work with FTHB or First time investors, but not a lot are going to work with loan amounts under $100k.

My recommendation is to get a loan from a PML or HML if you want this property and you don't want to use your income to qualify. And expect those interest rates to be quite high

Now is always the best time. 

Yeah it's worse than it was 5 years ago. But, news flash, it's going to keep getting worse. Hop in now.

Build a team. I have lots of connections and knowledge on the area if you would ever like to connect!

I agree with @Michael Baum

When I was in college, all my friends and classmates rented for a year at a time. Often they would stay in the area and work while school was out. 

Welcome to the REI Industry!

Cash-out refinance, HELOC, conventional mortgage, DSCR. These are all options that you could utilize to help slingshot your beginning!

Talk to the public housing authority representative for the municipality you would like to invest in. You can do this by calling up town hall and asking to be put in touch with them. It may take a few days to have them reach back out to you if you are not able to get in touch with them initially. Then, ask for them to provide you with a step-by-step process it takes to get a rental to be section 8 approved. Part of this is going to be an inspection. Literally print out the inspection report and go through your property grading it based off the inspection report they are going to use. Most likely it won't be up to standards and you are going to need to update/reno

There are various ways to structure a deal like this. Let's connect and I can try to provide some insight.

 Yes, they can all help you. Big banks (Wells Fargo, Bank of America, Chase, etc.) are less likely to treat you like a human and more likely to treat you as a commodity, but yes they can help you.

Credit unions will take an eternity and a half to get you started, but yes they can help you. 

Mortgage brokers are they best.

Let me know if you want to connect.

 Think about it this way:

A fix and flipper buys a property for $100k. They renovate it for an additional $50k. They are all in at $150k. Now, they sell it to a turnkey investor for $200k. That investor is going to have to pay the premium of the property and now, it may not even cashflow because they would have had to likely mortgage it at the 200k value with a 25% (50k) down payment at 8.5% = $1,153.37/month mortgage payment. On top of that who knows how much it could rent for. 

Now, let's be the person who buys the property initially:

We get a loan for 75% LTV on the purchase price and 100% of the reno costs with Interest only payments. That loan is for a full $125k. Let's say the whole renovation is going to take 8 months. With today's hard money interest rates, let's say the annual Interest rate is 12%. After the 8 months, here is your cost breakdown: $25k down payment, $1,200 ($150/month) for insurance, $8,000 for interest, taxes (let's say $600/month) of $4,800 = $39,000 (You can also add the hard money loan closing costs of ~$5k)

Now, the property you renovated is worth $200k and you can refinance from your Hard money Loan into a conventional or DSCR Loan with 75% LTV. You get $150k. You pay off the $125k hard money loan. Now you have $25k to work with. Let's take away $5k for the closing costs for the HML. Now you have $20k. Let's take away 10k for the closing costs on the refinance mortgage. You are left with $10k. Now you put that towards your expenses on the project $39k - $10k = $29k.

It cost you $29k to get $50k worth of equity in a newly renovated property doing that strategy.

Compared:

-$50k to get Turnkey, $50k of equity, and very little experience real estate investing

-$29k to get BRRRR strategy property, $50k equity, a TON of experience real estate investing

Glad I could provide value! 

A mortgage professional can, in theory, take less than an hour to preapprove you. But oftentimes it takes a day or two because not all borrowers are clear-cut. 

What I mean by this is that a mortgage professional is going to have to take into account all of the following: Citizenship status, income, employment history, address history, credit score, debts, and assets. This information is going to need to be verified by documentation (Valid U.S. ID, bank statements, W2, paystubs, etc.). This info is typically what the professional is going to need to see, but different programs require different information to be gathered. 

Once they verify all the information about you, they can preapprove you for a certain amount (this process is often humbling and it is good to have the professional explain exactly what they are doing when looking at your info so that you can leave the situation more educated). After you have the preapproval, time to go shopping!

 The same applies. Somehow get or take pictures/videos of all of the property. Tell them exactly what you want done and everything you know about the property (type of plumbing/electric, age of house, roof, walls, etc.). Do this for multiple contractors.