All Forum Posts by: Zack Karp

@Tony Kogan

Buy a McDonalds franchise!  McDonalds....the world's largest real estate company that also sells burgers.  Seriously, like @Ryan Dossey said your options are endless. Make money, but do it in a way that is fun and makes you happy. Do you want to be a landlord? Do you want to do multiple projects at once? BRRR? For me, I would use it as a down payment on an apartment complex, hire a great property manager, and sit back and collect. Or maybe I would BRRR. Depends how I'm feeling that week. :)

meant to tag @Kris Haskins too on that last post...

@Account Closed

That FHA info is stored on a system called FHA Connection. All lenders use this system with FHA loans, and you are assigned case numbers. The appraisal sticks with the property. Another drawback is lets say a DE underwriter declines a borrower for FHA, and that borrower goes to another lender for a FHA loan, the new DE underwriter can see the previous DE's notes and likely will not approve them. Because it looks bad to override another DE.

Your best bet is to see if the buyer can qualify for other financing (there is a new 97% LTV Conventional product called HomeReady), or maybe your state has down payment assistance programs (i.e. here in IL we have a $7,500 DPA program through the state you can use with Conv financing depending on the area, purchase price, and household income).

Hope that helps, best of luck.

@Bryan Blancke

1 day.  The day after you close, you can apply for a cash out refi as long as you paid cash and there is no lien against the property.  This is called Delayed Financing.  However you can only get 80% of the appraised value (if a SFD primary residence), not to exceed your initial cash investment, plus closing costs and prepaids.

Let me know if you have any specific questions for your scenario that I can help answer for you.

@Susie C.

I have a borrower that just won a multiple bid over a cash offer in the San Jose area using 90% 1-loan financing on a house over $1MM.  The Bay Area is hot, no question, but there are many factors, and every transaction is different.  As a lender, I will call the listing agent on the buyer's behalf and help seal the deal by reassuring the seller that the buyer is well qualified, and that my company closed 99.84% of our loans on time in 2015, and that the buyer smells like roses, etc, etc, etc.  Little things like this are what win in affluent, competitive markets.  You need to have a superior agent and lender in your corner, especially in that market, to help you win a multiple offer situation.

As a guy, I live by the motto, happy wife, happy life!  So for me, living in the right home with my family is more important than short term gain.  If your goals are aligned with that, then you know you need to go with option 1.  If you can bear to keep living in your current situation, then option 2 could set you up for more financial success later on.  For me personally, success is not only measured by my wallet, but also quality of life, and time freedom.

But from a logical financial standpoint, as you asked, that's tough.  Investing outside of your market can be great and can also be a disaster.  Obviously you need to have partners (realtor, property manager, etc) that you can trust and that perform.  There are many people here on BP that have had great success, and also many that have not been very successful.  Another point is that if property values continue to skyrocket like they have in the Bay Area, waiting to buy a $1MM property, that same property might be $1.05MM-$1.1MM in a year.  That appreciation may outperform investing that money elsewhere into rental properties.  You never know.  Too many variables, hindsight will always be 20/20!

Hope that helps!

@Scott Harlow

You can refinance from FHA to Conventional at any time, and be able to use the new appraised value. You do not need to wait 6 months. That seasoning is an overlay that some lenders and banks impose.

I assume this is your primary residence (since you purchased using FHA financing). You didn't specify how many units, but if it's a 2 unit you just need 15% equity, and if a 3-4 unit then 20% equity. This can be through the property appraising for higher (as you were asking), you would not need to put any cash down if you have enough equity based on the new appraisal value.

Hope that helps, let me know if you have any other questions!

@Amaf J.

Those costs are high if you are getting a par rate with no points.  Prepaids you have no control of, those are property taxes, homeowners insurance, and interest through the end of your closing month.

But the costs should be structured based on your goals.  Is this property going to be a flip or long-term hold?  If a flip, a good Loan Officer would structure this with zero lender fees, and maybe even a net lender credit (it usually takes 5-7 years to recoup upfront costs).  If this is a long term hold, you should structure with a lower rate and higher costs (you will come out ahead in the long run).  Perhaps that's what you are doing?

@Scott Moe

Hi Scott,

Mark Ainley with GC Realty.  He's here on BP and right in your area.

@Mark Ainley

@Stephen Chittenden

Ahhh...that's the catch. Higher rate for the added risk of the higher LTV and no MI.

Still a great product if you don't have more than 5% to put down at that price point.

If you had 10% to put down, I would be in the mid's 3's for the rate with no points.  So it makes sense they would be at 5% with no competition for that product.

Best of luck!

@Stephen Chittenden

That's a really great product.  I don't think you will find anything better out there for 800K purchase with less out of pocket.  I have lenders that can do 5% down up to 650K loan amount, but NASA is the only place I know of that goes above 650K with 5% down.

How is the rate?  I would imagine with no MI, they are a little higher.  Maybe some points as well?