All Forum Posts by: Samantha Ward

Even though your lease is coming to an end, many conventional underwriters may still debt you for an auto payment. Their argument is that you will still need some transportation once that car is turned in. Unless you can convince an underwriter that someone is giving you a car, you’re buying a car all cash or you’ll be getting a bus pass, expect to still be hit for an auto payment…

Most lease companies will allow you to extend the lease for up to an additional 6 months. If you think rates will be lower in 6 months, that could be a good option too. Your buyout will be a few dollars lower and if you grab a better rate, your overall loan payment would be lower as well.

Hey Jason! Thank you for all those points. To clarify I would be purchasing the property out of the state I am in so would that still affect how they look at my transportation needs? Also for the area I reside in you don't even need a vehicle, you can walk to everything anyone could possibly think of and when I do need to go further I have my own electric scooter.. I know that can sound a little silly but it works for my lifestyle.
Unfortunately the company I am leasing through does not allow extensions as that was actually my initial plan!

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Hi everyone!

I am new to the Real Estate Investing world and am looking into purchasing my first property! I have found a location and run the numbers and it looks like I would be making a positive cashflow, which is amazing! However for example; I make back my down payment in 2.5 years I am only then seeing the money go into my pocket. Ideally I would want to reinvest my profit into another property so I wouldn't be taking anything home then again until the new property is profitable. It still wouldn't be enough profit to do this full time without another job.

I see lots of people online who have quit their full time job and are doing Real Estate Investing only, buying new cars, being able to travel and I am wondering if this is just their "online persona", it is because of the amount of properties they have that has given them this financial/work free freedom or I need to find somewhere else that would give me a larger return.

Either way I am still moving forward on my journey :) I was just curious because that would be my dream goal to not have a 9-5 and my investments give me that freedom.

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Quote from @Tyler Warrick:

Quote from @Samantha Ward:

Quote from @Tyler Warrick:

Hey @Samantha Ward, great question!

If you are looking to purchase a primary residence, then a DSCR option that Nick mentioned will not apply to you.

My question to you is: are you buying out the lease in full, or are you going to finance the remaining balance? If you are buying it out (no loan) then it will not show up on your DTI. If you are going to be financing the remainder, then that payment will be included in your DTI.

I always tell my clients this: you need to qualify based on 1) income 2) assets and 3) credit. If you can qualify based on all three of these regardless of how you move forward once the auto lease ends, you have nothing to worry about.

Hope this helps!

Hi Tyler!

Thank you for asking for clarification - I would be financing the remaining balance. I also would not be making this a primary residence but purchase the property directly as an rental property. I am looking out of the state I live in and having everything done remotely

Oh my goodness, I didn't even see that part in your first sentence! Thank you for pointing it out.

For Conventional loans (best rates on investments) everything I said is still true. However, you will be able to "offset" the subject property's mortgage amount based on the fair market rent that the appraiser deems is fair for the property/area. Keep in mind they will use 75% of the monthly rental amount to offset the mortgage payment (i.e. the fair market rent is $2000/mo, the lender will be able to use $1500/mo as income to offset whatever your mortgage payment comes out to).

DSCR options are great if you CANT qualify for Conventional loans. They have higher rates and typically have prepayment penalties, however they require much less documentation.

What state are you looking to purchase in?

Wow this was great info to know! Would you know in the pre-qualification process if you qualify for a conventional loan vs a DSCR? Do lenders typically work with both options or would I need to find different specialized lenders to work out each option? Thanks again for getting back to me!

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Quote from @Simon Ashbaugh:

Hey Samantha, you're on the right track thinking about financing first. Getting pre-approved for a loan will be key. This will give you a clear idea of how much you can afford and make you a more attractive buyer to sellers. Look for lenders who specialize in out-of-state investment properties. Continue to refine your understanding of the market. Look at rental rates, vacancy rates, and typical property taxes in your target area. This will help you assess the potential return on your investment.

Out-of-state investing can be done successfully, but having a reliable property management company in place is important. Your Core 4 Real Estate team will play a very important role in achieving your goals. Lastly, finding the right property can take time. Don't rush into a purchase you might regret later. Hope this helps!

Hey Simon! Thank you for all this great information. Would you advice I look for a lender in my state who specializes in out of state or would it be better to find a lender in the state I would be purchasing the property?
I'll be reading over the article you linked shortly!

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Quote from @Everest Harkey:

Hi Samantha! It's great to have you here. Congratulations on taking your first few steps to invest in RE. Since you've already found your ideal location, next would be to find a lender or the money you will use to secure the deal. Once you have the money for the deal sorted then you can start underwriting properties and submitting offers. I'd also consider finding your team and boots on the ground, they can often help with underwriting, finding comps, and giving advice on neighborhoods, etc. Let's connect to have a deeper discussion.

Thank you for connecting Everest! That's what I was thinking but it never hurts to ask advice!

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Quote from @Tyler Warrick:

Hey @Samantha Ward, great question!

If you are looking to purchase a primary residence, then a DSCR option that Nick mentioned will not apply to you.

Hope this helps!

Hi Tyler!

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Quote from @Nick Belsky:

If you are doing conventional or agency financing, the lease will be added to your liabilities and included in your DTI. If you have an auto liability that is ending is less than 10 months, then it will be excluded from your DTI.

If you are using a DSCR loan to purchase, it won't matter as personal income, DTI, and employment are not considered for being approved for the loan.

Cheers!

Thank you for responding so quickly! I am completely new to all of this so just clarifying - when I buy out my lease it will be for a 3-7 year period. It sounds like from what you said it would show up on my DTI in that case. I haven't yet looked into a DSCR loan and what the differences would be.

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Hello everyone!

I am just starting out my real estate investing journey and wanted to introduce myself. I've been doing quite a bit of research over the last couple weeks and have decided on an area I think has great potential for my first purchase :) I'm not really sure where to go from there, if I need to looking into pre-approvals, find a lender.. or whatever else might be the next step! From what I've seen I should not open a LLC or trust at this point since it would be my first property and it would be out of the state I live in. So that brings up another point of having to do everything remote.

Any advice or help at all would be greatly appreciated and anything you wish you would have know before getting started would be helpful info as well!

Looking forward to connecting and meeting more like minded people!

1 Vote

Hello everyone!

I am looking to purchase my first rental property but I also have my vehicle lease ending in 2 months. I am wanting to buy out my car lease but am wondering how this will affect getting a mortgage. I know when you purchase a car they tell you not to do it at the same time as buying a house but I don't know if buying out a lease has different affects (since it's a less amount, I've already been making payments, etc.)

Any advice would be helpful as this seems to be a situation I can not avoid! Thank you :)

2 Votes

All Forum Posts by: Samantha Ward

Samantha Ward has started 3 posts and replied 9 times.

Post: How can buying out your car lease affect your options for getting a mortgage?

Post: When will I start seeing a return on my investment?

Post: How can buying out your car lease affect your options for getting a mortgage?

Post: New Real Estate Investor Intro!

Post: New Real Estate Investor Intro!

Post: How can buying out your car lease affect your options for getting a mortgage?

Post: How can buying out your car lease affect your options for getting a mortgage?

Post: New Real Estate Investor Intro!

Post: How can buying out your car lease affect your options for getting a mortgage?