All Forum Posts by: Tyler Rowland

If your wish is to get into investing in real estate, I would second what many have already said.  Start a career path now.  The loans with the best terms are loans that require you have some job experience and a consistent income under your belt, most require a minimum of 2 years in the same field.  Better to start now then later.  

Yes you can get Hard money loans to invest in real estate, but if you want to be able to refinance out of those high interest rate loans someday, then you will need to have that base.  That 2 year clock starts when you start that occupation.

And if you can qualify for a conventional loan, you will definitely qualify for that hard money.  Which means you have more tools and options under your belt, giving you a greater likelihood of success.

I think that a lot of people get confused with the differences between Mortgage loan officers and brokers as opposed to banking institutions mortgage loan officers. The biggest difference is bank loan officers are not required to get licensed through the NMLS (Nationwide Mortgage Licensing System) ,And have different overlays or rules for the loans that they do. When you go to an NMLS licensed Loan officer that is Fannie and Freddie qualified you will be able to qualify for a 30 year 75% LTV refi as long as you have less than 10 properties secured by Fannie or Freddie backed loans and other qualifications that underwriters will verify.

Conventional loans have a loose definition as well that is very confusing.  But in the mortgage world a conventional loan is one backed by Fannie and Freddie.  In the banking world, it can also mean "a loan with a fixed rate" for the life of the loan.  

We just did a cash out refinance loan for someone with 12 investment properties, but because 4 of those properties had commercial loans (bank business loans)  we were able to do a Fannie Mae cash out refi on one of those properties, or a conventional loan.  Because they still hadn't exceeded the the 10 conventional loan limit.  

There is a lot solid advice on this thread, and I am getting in on the game a little late here I know.  In my personal goals, I want the units I have to cash flow at least $150/month after everything including repairs, capex, vacancies, and property management.  As long as they do that for me then I feel like it is worth keeping.  There is a great article by @G. Brian Davis about whether you should keep or get rid of your first purchase.   Here is the link.  2 months later you have probably already decided what you will do, but for those stumbling on this thread I hope you glean plenty of knowledge! 

https://www.biggerpockets.com/blog/sell-house-rental

@Steve Theobald, I really liked your contribution to this article.  I think once you implement a tiny transfer tax like the one that Rep. from Heber is proposing, it will open the door to larger ones.  Until you get to that outrageous transfer tax of 20k from Maryland.   I didn't realize how much of a buffer something as simple as a non disclosure state gives We the people, from an ever growing government apparatus.   

Hey Daniel, sounds like you are on the right path to acquire some real estate investments down the road.  Before I was a mortgage lender, I worked at a factory on the night shift.  Because of that, I was able to binge listen to bigger pockets.  That stirred up a lot of ideas and a different ways of thinking financially.  I really loved the book Set for Life by @Scott Trench.  That book helped me see how those different ways of thinking could work in real life, step by step.  That ultimately lead me to become a Loan Officer here in Utah.  But one of the things that helped me the most was going to a home loan broker and discussing what I needed to do to be ready for the investment when it came up.  It gave me a punch list of things I needed to do so I wasn't just spinning my wheels. Having that direction was key, and I loved it so much that I decided that is what I wanted to do for people as well.  Welcome to BP, keep asking questions and keep scheming. 

@Kerry Baird  Thanks for that great list of potential HELOCS on investment properties.  I did not know America First in Utah did that on investment properties.  That is extremely helpful!

It is hard to say if paying points makes sense in every scenario.  But just off of averages I would like to help people understand if it makes sense to buy down a rate.  

The average person in the U.S. owns a home for about 10 years.  That average changes all over the U.S.  If you can recoup the cost of buying down the rate in 5 years, I think that it is always worth a look. 

If you are deciding whether you should buy points or use the money as a down payment, that too is about your situation. If you plan on doing a cash out refinance later on down the road, a down payment would get you closer to the 75 - 80% LTV's that you need to do a cash out refi.

Cash out refinances usually have a rate hit as well.  So getting a lower interest rate in the beginning, only to have it jump a point after doing a Cash out refinance would be counterproductive.  A larger down payment would be more helpful than buying down the interest rate in that case.

But if you want your property to cash flow as much as possible in the very beginning, then a rate buy down would produce that result better than a larger down payment in most cases.

Ludovic Ott, That is correct. The best way to make that down payment back quickly is buying a property with substantial equity in it. Or by finding properties that you can add value to by fixing up or adding space to. I would second the the HELOC by @Chris Mason.  

I know that this thread was over 2 years ago, but I did find it helpful.  Thought I would update it in case others are looking for answers to questions similar to this.  USDA does require the property to be your primary residence and meet the occupancy requirements for the property.  Must be occupied within 60 days of purchase, and must be considered the principle residence.  After 12 months you have met the intent required by USDA.  As mentioned above, USDA will not make you refinance into a loan if you want to rent out the property, but they do issue some warnings.
When a property is no longer occupied by the borrower as their primary residence it will affect their ability to refinance the mortgage with USDA or continue to be eligible for servicing and loss mitigation options. Borrowers will also be ineligible to obtain a new Section 502 direct or guaranteed loan until they have sold the current dwelling that is guaranteed by USDA.

I only know of one called "Roof."  If you get a Pro Membership, you can get discounts on both.