All Forum Posts by: VICTOR TEYE

Hi Victor,

I'm looking to buy soon in the west valley. I am going to buy something that cash flows.  If the market goes down, I should still be able to make money on the rent.  I am no expert, but if you sit on the sidelines waiting for the perfect time, you will be still be waiting when it comes time to draw your social security check.  As an agent, I'm sure that won't happen to you.  Let me know if you come across any properties that look like cash flow rentals.  Then if you don't buy them, you can sell them to me.

@VICTOR TEYE

I may be missing something. Why are you worried about refinancing a rented property that has an FHA loan? Because you want to have an FHA loan available for you to purchase another property with little money down? If that's your goal, you need to find a fixer upper with equity, get private money (10-15% down on entire project), fix it up, rent it out and refinance. There are lenders that will give you 70-75% of the fixed up value and you can get most of your cash back out.

Victor, congrats on being able to hold on through the downturn ... in that regard, you did better than many. While financing is very important and necessary in most cases, finding a deal in this market with sufficient value add and cash flow for a buy-and-hold may end up being the high tent pole to overcome. Such a deal will insulate you from getting caught up and put in a bad place by market fluctuations that are coming (sooner or later). I would focus my energy on saving and then finding such a deal, and if you don't find it, don't pull the trigger, keep looking ... no deal is better than a bad deal. Best wishes to you my friend on whichever path you choose.

Victor,

I was in the almost exact situation when I moved to Arizona and needed to buy a second house. I purchased a house in 2007 FHA and then the market crashed. I ended up refinancing in 2011. No money out of pocket and my house was still under. When I went to purchase the house here in Phoenix in 2014 my broker found out that when I refinanced it was no longer considered an FHA... Even though I thought it was. I would Double check to make sure your current loan (refinance) is actually an FHA... You might be surprised!!!

Where did you move in 2011 after the refi? Was it a cash out refi? If yes, did you use those proceeds to purchase another property? Don't mean to pry, but this will help fill in the picture of your situation and may open up other options or make it clearer which option is best for you.

As for what you'd like to invest in, can you get a duplex to comfortably cash flow in a non-ghetto part of Tempe these days if both units were rented, including PITI (with 3.5% down), maintenance, CapEx, vacancy, PM expenses, etc.? How much value add can you pull off on such a deal? I ask because I know your market has gone up an awful lot lately (I own rentals in Phoenix) and would not buy without good solid cash flow and value add, especially with only 3.5% down, in case your timing turns out to be unfortunate. If you can't realistically find this in today's market, I'd advise save up and wait.

1. Depending on the type of property (rental) and location, if you can show that you need to upside (family is grown) or move close to the job, then you might be able to get a FHA exception to get a 2nd FHA loan.

2. If you and the property in question qualify for Fannie/Freddie community loan, then you can buy the new property with just 10% down. No Rehab. That comes out of your pocket.

3. Buy the new property with 20% down. No Rehab. That comes out of your pocket.

4. Refinance the current property to conventional and free up the FHA loan.

5. Sell the current property to free up the FHA loan.

6. Wait until you have the funds to buy the new property.