All Forum Posts by: Stephanie Medellin

Sorry, my math was off regarding the $28,000. It should have been more like $35,500 that needs to be paid down, plus any closing costs that need to be added to the loan amount. ($310,000 x 75% = $232,500 and $268,000 - $232,500 = $35,500)

Probably makes it that much harder...sorry!!

Hi David,

A cash out refinance on an investment property will generally top out at 75% LTV and CLTV (combined LTV). Could you possibly contribute $28,000 to pay down your loans reduce your LTV?

(Even though you're consolidating debt currently borrowed against the home, in a case like this it most likely will still be considered cash out.)

I don't know that you'll be able to keep the hard money loan, which I'm assuming is the 1st lien, and also get a new second loan for the additional payoffs. You will probably have to do one loan to pay off all the current liens.

If you live in the home as your primary residence, you would be able to borrow up to 85% LTV with a cash out refi.

Wayne Brooks is 100% right. If you are getting a loan from a private money lender, you are financing, not paying cash. Proof of funds is only used to show cash in the bank.

A private money lender should issue you a preapproval letter stating you are preapproved to borrow $xxx,xxx.xx which you would submit with your offer along with proof of your own funds in the bank that will be used for your down payment (assuming you're contributing a portion of your own money).

When the lender makes a private money loan, they will typically "fund" the loan into an escrow account or trust account (however it's done in your state) after all loan conditions are met, and it will go directly to the seller.

Hi Jason,

If you are getting a salesperson's license, you will need to work under a broker to collect commissions and negotiate sales of other people's property. If you are getting a broker's license, you can work for yourself to negotiate sales for others. When working under a broker, there is (in most cases) going to be a commission split, where you and the broker will each get a percentage of the commission. When working for yourself, you won't have to split your commission. You probably know the requirements to get a broker's license in Indiana better than me.

When selling your own property, any time you're a party to a transaction and you're a licensed agent, you need to disclose that you hold a real estate license and have an ownership interest in the property, at least in California. I don't know the laws in your state, but I am assuming they are similar.

I think much of what you're asking will depend on your agreement with your employing broker. You will have to ask them if you can you list your own property without a commission split. If you're simply doing your own deals on the side (buying and selling) without a formal listing in the MLS or a commission involved, you should be able to continue as if you didn't have a license. If you are collecting commissions, it is really the broker who is entitled to the commission and you are entitled to whatever portion you've agreed to with your employing broker.

@Nicolas Gonzalez

What are the property taxes like in Winston-Salem, NC?

Thanks everyone for the suggestions.

@NedCarey I had no idea Baltimore had areas that cheap but after looking up some listings you're right! They look like inner city areas but I realize at that price you're not going to get prime real estate.

@Derek W. I did a quick search on the LA MLS, but all of the properties coming up in Bakersfield are $150,000+. This is a small portion of the listings since our MLS doesn't officially cover Bakersfield, but higher than I'd like. I visited Taft once several years ago when Auction.com had open house weekends at all of the REOs they were going to auction. I remember driving and driving down a country road in the middle of nothing but farmland for at least 20 minutes thinking that we took a wrong turn. There were no other roads, buildings, or cars! They did have some homes starting at $1,000 in town.

Thanks Bryan. Right now I'm not ready to purchase anything. I'm debating the idea of selling my house and purchasing a few rental properties cash, something I should have done back in 2008! I was looking for names of smaller or mid-size cities that may have what I'm looking for so I can start researching. Most likely, I'll be moving to said location, at least temporarily, so I'd like to explore some options.

I see a lot of posts mentioning fairly cheap purchase prices. I've lived in upstate NY, and am now in Los Angeles. I know real estate in upstate NY isn't too pricey, but I wanted to get a feel for some other cities in the US where one could buy duplexes, triplexes, and even 4-plexes for less than $50,000. I'm not talking about markets where every once in awhile there is a fire damaged or severely neglected property at that price, but areas with a good supply of real estate the under $50,000 price range.

Detroit is probably the only place I wouldn't want to go!

Oh, and congratulations on having achieved so much at 19! What you have done so far is really impressive. Don't waste money or go into debt by going to college - you're already a success!

Plan out how much you'd like to spend & borrow, and speak to a lender to determine how much income you need to qualify.

Amend your 2012 taxes and claim the amount of income you need, plus a little cushion. DTI's are going down to 43% 1/10/14, unless you get a DU approval for more. That could be difficult with limited credit history, but I don't know if you have 3 scores or what your scores are.

Claim enough income for 2013 too. It would be best to have a CPA or tax preparer file both returns, as you'll need a CPA letter to verify that you've been self employed for the past two years, unless you have a business license for your city.

Order a tax transcript to verify that your returns have been processed. You can call the IRS 1-800 number and order it over the phone. It is an automated system.

Since you don't own any property under your name, why not get a 4-plex owner occupied with an FHA loan? It will be a low down payment and they can work with non-traditional credit history such as a cell phone payment, or other bills you've paid consistently over the last 12 months and can document. I know this may be hard to come up with accounts having lived at home, but try to think of a few.

The real downside of FHA is the upfront and monthly mortgage insurance, but you can always refi to conventional after you've built up your credit.

If you still cannot qualify on your own, hopefully your Dad will agree to be on the loan with you as a non-occupant co-borrower.