All Forum Posts by: Zack Karp

@Eric Blair easy solution. Get a heloc on your current primary home. Yes the rate is going to suck, but don't refinance those 2% rates, it's not worth it. Then use that heloc as a down payment for a new home. You can buy a new primary home with 5% down with a Conventional mortgage, and the available equity in your home will more than cover that. And then with all the money you should be saving, every year you should have another 5% down to keep house hacking each year until you're ready to stop.

Best of luck!

@Paul De Luca thanks for the tag!

@Account Closed so the answer to your question depends on who is answering it. Common sense from most people would be to pay off the credit card, and maybe pay down the car. However, there are several layers to this.

First off, you will have a much easier time winning a property with a Conventional loan vs FHA. Sad but true statement, as this comes down to seller perception. I'm not saying you cannot get a property with FHA, but in a multiple offer situation, a seller will take a Conventional buyer over a FHA buyer every time. Conventional allows you to put 5% down for a primary 2-4 unit. Conventional also has a tighter DTI requirement, and higher reserve requirement. But ultimately a better loan for you too. You may not be able to qualify for Conventional, or what you qualify for might be too low, but it's absolutely worth exploring.

If your credit card minimum monthly payment is only $25/mo, then you are actually mostly likely better off NOT paying it down or off, and having that extra $7K available for down payment and reserves. Then after you close on a property, then you can decide if you want to pay it down or off.

If you want to discuss your strategy or numbers, feel free to reach out. Happy to map out a game plan for you to not only qualify for this first property, but set you up for success for future properties.

Best of luck!

@Johnny McKeon I posted on your other thread, but to answer the above, no this is not a high balance situation. The loan amount is within the standard loan limit for a 4-unit. That rate is crazy high and you should be in the mid-6's for this scenario with no points.

Best of luck!

@Johnny McKeon

Nah that's crazy high. Not reasonable at all. I'm in the mid-6's for that exact same scenario with no points. Same program, Fannie 5% down.

Find another lender with reasonable terms. Feel free to reach out if you need any help.

Best of luck!

@Dennis Dougherty the other benefit to selling is that your full entitlement automatically gets restored. So then not only could you buy another home, but then still have secondary/bonus entitlement to buy another one in your name. Same with your wife, she can get 2 in her name too. So if you get out of the negative cash flow home (I agree with the others above), you can hit the reset button, and house hack 4 more times between you and your wife using your VA benefits, and get the right type of cash flowing properties under your belt with $0 down, before having to move to Conventional financing.

TYFYS and best of luck!

@Jason Carter there is plenty of opportunity! I'd be happy to set up a call to discuss your lending options and numbers. Even if you're still in the thinking about it/planning stage, it will be helpful to get a very realistic idea of where you stand and what your options are. Feel free to reach out whenever you're ready.

@Paul De Luca thanks for the tag!

@Preston Phillips I can certainly help you structure this scenario to your benefit. Feel free to reach out if you would like to set up a call to discuss.

@Jonathan Klemm and @Paul De Luca thanks for the tags!

@Tyler Henkel let me know if you want to set up a call to discuss your financing options and map out a gameplan. I have been doing mortgages for 26 years and specialize working with investors and house hackers. What you get from me is honest, no BS, reality check advice and tips to help you not just buy a property, but set you up for future success if you are wanting to scale this into something bigger. Feel free to shoot me a dm whenever you are ready to connect.

@Andrew Stouse you can ABSOLUTELY buy a property using your VA loan with not only ZERO down, but with the right realtor and offer, you can actually walk away with cash back in your pocket at closing. By building a seller credit into your offer, the seller can pay for ALL of your closing costs and prepaids, and you will get your earnest money back, plus any property tax proration credit as applicable. I have helped hundreds of Veterans with this strategy.

You should have a small reserve set aside for repairs or unexpected expenses, say like $2K-$5K, depending on the property condition. You can also get a home warranty if the mechanicals are nearing life expectancy, or for peace of mind.

Getting started is way easier than you think, and don't let analysis paralysis get in your way. The longer you wait, the longer it takes to start making money and get to property #2, 3, 4, etc.

TYFYS and best of luck!

@Quincy Mingo if you are not on title now, then you could add yourself to title, then wait 6 months and then do a cash out refi. This would save you a lot of money in closing costs compared to a purchase, plus you would not need to come up with the down payment. (The City of Chicago transfer tax alone on $400K is $3,000 just for the buyer side, plus another $1,200 for the seller.)

If you purchase, then you wouldn't be buying from the LLC, since the property was never deeded to the LLC. The LLC doesn't own it. Your partner is on title individually, so he is the owner and would be the seller. Yes you could do a Conventional 5% down loan as a primary residence. Keep in mind this way you will need funds for the down payment, and to buy your partner out.

You need to get the LLC out of your head. You established a LLC with your partner, but it doesn't even own the property. It's pointless. Just dissolve it. Totally unnecessary. You cannot buy the property with the LLC, having a property in a LLC doesn't mesh with Conventional financing, and it's just an added cost of filing taxes and annual filing that you can do the same thing on your personal return. If you are leasing units from the LLC to tenants, then your leases are illegal, as the LLC is not the owner of the property. And again if you want the LLC for "protection", instead just get an umbrella policy on your homeowners insurance once you buy it.