All Forum Posts by: Torrell Palmason

To start you off on a $300k the Down payment for a conventional loan on a 1-unit is 15% or$45k and on a 2-4 unit it's 25% or $75k.

After that the closing costs will include origination charge, taxes, Appraisal, Credit Check, Flood cert, Insurance, Mortgage insurance if your LTV is higher than 80%, Title charges. With these charges you can see how it will vary on each one but middle of the road should cost you roughly 6k-7k. Reserves will be determined by the Automated underwriting which will look at the overall strength of the Credit package.

I know QuorumFCU on a owner-occupied will go up to 95%.  Below are the terms off of their site.

As @Charles Carillo stated you can get approved for self-employed at two years with tax returns. The other option he mentioned is also known as Non-QM. Below I pulled my answer for another user looking into Non-QM.

"A Bank statement loan is used primarily for a self-employed and will require 12-24 months of business or personal bank statements. If it is personal bank statements then all deposits will be counted toward income whereas business bank statements will take only count 50% of deposits towards income. The disadvantages of this loan type is it will be a higher rate than a conventional, Minimum credit score allowed is a 660, 6 months of reserves, and a 80% max Loan-to-Value. These terms are based on what my company does and will vary from lender to lender.

On a DSCR loan, rents of subject property must be 100%-115% of the mortgage payment. The max LTV to value will be 85% and will require 6-12 months of reserves. The minimum Credit score is 660. Since this is a Non-QM it will have higher rates than a Conventional. There will be variations of the terms above based on program and lender however these are the terms set by the Non-QM DSCR 1-4 unit that my company uses."

These options will allow you to keep building your inventory while you wait for the two year requirement. Conventional is also possible, however it will be at the Underwriters discretion based on if they see you in the same professional field counting your time as an appraiser towards you REI time. This will vary Underwriter to underwriter.

See Fannie Mae Guideline regarding length of self-employment below.

"Fannie Mae generally requires lenders to obtain a two-year history of the borrower’s prior earnings as a means of demonstrating the likelihood that the income will continue to be received.

However, a person who has a shorter history of self-employment — 12 to 24 months — may be considered, as long as the borrower’s most recent signed federal income tax returns reflect the receipt of such income as the same (or greater) level in a field that provides the same products or services as the current business or in an occupation in which he or she had similar responsibilities to those undertaken in connection with the current business. In such cases, the lender must give careful consideration to the nature of the borrower’s level of experience, and the amount of debt the business has acquired."

Best of Luck!

Another option not mentioned is going to the Non-QM side. There are two main options for you that will not care about DTI, Bank statement Loan and DSCR Loan.

A Bank statement loan is used primarily for a self-employed and will require 12-24 months of business or personal bank statements. If it is personal bank statements then all deposits will be counted toward income whereas business bank statements will take only count 50% of deposits towards income. The disadvantages of this loan type is it will be a higher rate than a conventional, Minimum credit score allowed is a 660, 6 months of reserves, and a 80% max Loan-to-Value. These terms are based on what my company does and will vary from lender to lender.

On a DSCR loan, rents of subject property must be 100%-115% of the mortgage payment. The max LTV to value will be 85% and will require 6-12 months of reserves. The minimum Credit score is 660. Since this is a Non-QM it will have higher rates than a Conventional. There will be variations of the terms above based on program and lender however these are the terms set by the Non-QM DSCR 1-4 unit that my company uses.

Both of the above options will loan to a LLC with a personal guaranty.

Best of Luck!

Another option you have available is the Non-QM DSCR loan. With this program rents of subject property must be 100%-115% of the mortgage payment. The max LTV to value will be 85% and will require 6-12 months of reserves. The minimum Credit score is 660.

Since this is a Non-QM it will have higher rates than a Conventional. There will be variations of the terms above based on program and lender however these are the terms set by the Non-QM DSCR 1-4 unit that my company uses.

Hard Money while it can be used for a purchase I would recommend more for short term lending. The terms are generally 6-12 months and it can go longer. I would use this more for a Flip or purchase that you intend to refinance out of Hard money.

Also side note portfolio loans can be used on the very first property there isn't an amount of properties you need for a portfolio loan.

Best of Luck!

Question is $525,00 the ARV for both duplex and 4plex?

I would suggest talking to some local Hard money, most can loan up to 75% ARV and if they have no Down payment requirements that leaves you bringing in roughly $6,250 to close. If they do have a down payment requirement then you will need to bring in the 5%-10% down payment. 

The Hard money will cover purchase and rehab so as I said get on the phone and start a conversation so you can get a deal in the works :)

Best of Luck!

I will give you three separate ways to go about this.

There are options for investment/Non-Owner occupied HELOCs. PenFed Credit Union offers these HELOCs at 80% or less combined-loan-to-value, another that I know has these type of HELOCs is Quorum. I would look at either of these options and see what they can do for you. However, to do these you would have to transfer title to your name and switch it back to your LLC once the loan is completed

There is also a Non-QM option with Full Doc. The Full Doc loan will be similar to a standard loan with Fannie/ Freddie and require the same documentation however this will allow you to keep the title in the name of the LLC.

The third option is to switch title back to yourself and do the loan as a Fannie and once you have completed the loan put title back into the LLC. 

Best of Luck!

Well to start do not falsify saying you'll be living there to get a owner-occupied HELOC, that is occupancy fraud and can get you in some serious trouble.

There are option for investment/Non-Owner occupied HELOCs. PenFed Credit Union offers these HELOCs at 80% or less combined-loan-to-value, another that I know has these type of HELOCs is Quorum. I would look at either of these options and see what they can do for you. 

I will reiterate though do not try to get a Owner Occupied loan if it is not going to be owner occupied, you don't want to play that game.

Best oF Luck!

Unfortunately while they do look at current market value, lease will take precedent as this is what you actually receiving. Best advice is hold until you can renew lease or if you need to get refinance before then they will have to use your current leases.

Best of Luck!

If you are unable to show work history a option for you is Non-QM DSCR loan. With a DSCR loan, rents of subject property must be 100%-110% of the mortgage payment. The max LTV to value will be 85% and will require 6-12 months of reserves. The minimum Credit score is 660.

Since this is a Non-QM it will have higher rates than a Conventional but can give you time to get your work history in self-employed. There will be variations of the terms above based on program and lender however these are the terms set by the Non-QM DSCR 1-4 unit that my company uses.

Best of Luck!