All Forum Posts by: Stephen Chu

Hi,

Want to see if there are good websites to check on fixed mortgage interest rates on non-owner occupied investment properties (2-4 units) in the Bay Area. It seems investment property refi rates are more difficult to obtain online than traditional owner-occupied refi rates. If there are websites you use as a barometer, and willing to share, I am all ears.

TIA

Is there a page on BP.com that lists all the books mentioned (and frequency) by each podcast guests' Final Four questions "what's your favorite real estate/business book"?

Would love to see it. I have a hard time to remember which books I want to purchase!

@Stephen Akindona I specifically remember one of the BP podcast guests in some episode mentioned that during his delayed financing cash purchases, he tells the closing company to just add a line item of "rehab/remodel cost" to the HUD, and since the closing company doesn't really care if you want to add money into the close, later when you initiate your delayed financing, your additional money will let your refi out more equity out of your property than if you hadn't put in that line item, because the amount you can refi out is based on what's on your HUD when you bought.

I always wondered how true this is, and if there are limitations.

Hi,

Since in the Bay Area, almost every loan is either a high-balance conforming loan or a jumbo loan, I was wondering whether the financing strategy of Delayed Financing would even work. Say, you close a property in all-cash, then what lenders are willing and able to perform a Delayed Financing refi for you within 6 months of your close? Are there limits (like, no jumbo)? I haven't called around to ask yet, but I can imagine most B&M banks cannot do this, due to their business model heavily focus on putting people into homes to live from the get go? Will interest rates be higher in DF than in a traditional loan at closing? Any other gotchas and tips that you can think off worth sharing?

Thanks!

I live in the Bay Area. I would like to know whether one can buy a SFR zoned as a R1 that also has a ADU in the backyard and rent both out after closing, if it would be problematic from a lending perspective during closing?

Will lender not be able to count the rental income at maybe 75% towards my DTI ratio?

Will I still be required to put down as much as 40% simply because I am not owner occupying it?

Is it even legal to own a SFR but rent both living spaces out to different tenants as a SFR zoned property?

Thank you so much for the gems you dropped in the reply! I will for sure gobble them up in my readings.

Thanks for the responses so far!

I totally agree with almost all of your sayings: history only rhymes with its past; the "looking at the wrong ball" analogy. So good.

I'm totally coming from a learning angle, not from a future-predictor angle. I already picked out a couple of learnings:

- 20% equity sometimes isn't that much

- when it dropped, it fell, fast and hard

- cash is obviously king during tough times, and maybe you can even make money with gold when things are really bad

I like the most what Buffett said: be "fearful when others are greedy and greedy when others are fearful."

Do you guys still recall, for those lenders/brokers/etc. that somehow survived, in hindsight, what contributed to their "luck"? Economies of scale? Special clientele? Cashed out and went for vacation for 2 weeks, then came back and started buying a year later? My HELOC broker told me, at that time, if you had a HELOC balance, the repayment plan couldn't be changed, but the lender restricted most (or all) future borrowing. That's the best OPM cash to be had right there.

Love the replies. Not meant to stir up painful memory of yours. Only learning from the best of you all. Thanks!

My RE education is young, and I want to learn not just what is currently happening, but also during hard & tough times in the past. As someone famous once said, "... not learn history ... doomed to repeat it."

We all know what happened during the 2008 melt down: liquidity became super tight, the big banks needed bailout money, and all that. What I want to know is, when it came to HMLs, or even smaller lenders or funds or syndicated lending pools, how did these entities fare?

Did most abruptly shut down just like Lehman Brothers did overnight?

Did some fare better than others somehow? Maybe entities who owned actual CF properties at the time (without being underwater) fare better than those who were merely providing a service?

Did the SMB businesses feel it first, before the big banks/companies started to? Which domino fell first and in what order? Residential or Commercial? Low quality region first or highly appreciated market first?

I'm trying to think: if there is a future financial melt-down #2, as a lender (or a business owner in the lending or note business), what did history teach you to prepare for it this time around?

Thanks!

I saw a house in a nice neighborhood that looks kind of outdated. Upon looking through its windows, it even seems it’s vacant. What are the steps folks have succeeded with in meeting the owner and then finding out whether they are interested in selling or not?