Comments on: Z2: Case Studies

By: Angie Williams

Angie Williams — Thu, 27 May 2010 01:52:02 +0000

I would start by asking what their investment goals and objectives are for this house. How long will they have the home. What is the average rent in the area. From their I would calculate their cash flow and provide them the information to make an informed decision.

By: Bryce Zimmerman

Bryce Zimmerman — Sat, 22 May 2010 01:25:28 +0000

About the only option with would be 80% conventional financing, plus typically this amount is needed to cash-flow, while also avoiding MI. Depending upon if these are a flip or a long term investment would dictate weather it should be an 5/1 I-O or a 30yr FRM

By: Elisa Wu

Elisa Wu — Sun, 28 Feb 2010 23:16:19 +0000

They could do it since they have downpayment, and as long as they inverst a property under 400k, it would be fine.

By: Daniel Mulvehill

Daniel Mulvehill — Fri, 26 Feb 2010 23:26:36 +0000

For Vashon and Riley; offer them a FHA Non owner loan program, no pre-payment penalty they can finance tthe homes with the resent FHA change on Flips being acceptable under the seasoning law change and with that much potential capital available to buy in the mid to low range price bracket to enhace the likley hodd of buying more properties.Keep the loans within the conforming limits to avoid a sudden change in the non-conforming arena and keep steady on what is working withn the present economics of 2010?

By: Kimberly Peterson

Kimberly Peterson — Thu, 31 Dec 2009 20:29:45 +0000

a 30 year conventional fixed loan for them should work.

By: Karen Tuff

Karen Tuff — Thu, 31 Dec 2009 09:33:35 +0000

If they are holding the property to rent, then a 30 year fixed loan, an arm if they want the investment short-term. I would keep the price point low and there is a lot of out-of-work talented contractors that can be hired to do fixers.

By: Harold Burton

Harold Burton — Thu, 31 Dec 2009 06:29:34 +0000

I would suggest that they look at REO’s. Multi family properties in foreclosure. Duplex, samll apartment building with 5 to six units. Purchase price not exceed $400,000.00 and call it a day.

Another suggestion would be to covert there primary to adult care depending on the local zoning. If there primary residence becomes rental say for 12 month’s they would be able to qualify for a larger investment property.

The current interst rates are so low I would suggest a 30 year fixed and possibily look closely at the advantages of a 2/1 buydown. This would certainly help with future cash flow.

By: Kelly Fiscus

Kelly Fiscus — Wed, 30 Dec 2009 23:41:10 +0000

I say 30 year fixed rate if you are keeping the properties as long term investments. Yes you have to have a big down payment but it lowers the LTV and helps with the CASH FLOW.

If you are thinking short term do an arm.

By: Chris Yanke

Chris Yanke — Wed, 30 Dec 2009 23:37:40 +0000

If they are buying with intent of owning several properties and selling them over the course of SEVERAL years but having them be rentals, the Conventional 30 year Fixed rate program would provide a good value as long as they put 30% down. Investment properties have a large hit in fees and rates and the more cash you put into a transaction the benefit you’ll have of maximizing your rental income. However, some banks still offer 3 and 5 year investor ARM loans so if Vashon (who picked that name???) and Riley had shorter term goals of selling within those time frames then I’d review that scenario as well. I agree with Kelly.

By: Kelly Fiscus

Kelly Fiscus — Wed, 30 Dec 2009 20:57:16 +0000

A conventional loan is best if they are planning to keep the property long term. An arm is great IF the investment property is for short term.

By: Arash Fiuzi

Arash Fiuzi — Wed, 30 Dec 2009 09:41:33 +0000

The other advice I could give them is to convert their prinipal residences to rentals if they could achieve positive cash flow on their departing residence. In essence, I would put three options inf ront of them and let them pursue the ones they feel most comfortable with.

By: Arash Fiuzi

Arash Fiuzi — Wed, 30 Dec 2009 09:40:15 +0000

I would recommend that they stick to REOs and short sales and to keep the purchase price under $400,000 to keep the LTV below 75%. If they can find a trustee sale for $100,000 I would adivse them to buy that cash and rehab it with a cash out loan once they have achieved seasoning.

By: James Haechler

James Haechler — Wed, 30 Dec 2009 04:51:09 +0000

Depending on what there goals are would determine the type of loan. As long as income and credit scores are good a conventional 30 year loan would be where I would go. Wouldn’t put them in an adjustable loan. If they couldn’t flip the house or rent it they would be at the mercy of the adjustable.

By: Jason Brock

Jason Brock — Wed, 30 Dec 2009 00:44:58 +0000

I believe it is completely dependent on what their long term goals are… flip, rent, and keep. These are the questions that must be asked prior to writing a loan for them and looking into their best interests. If their goal is to develop a portfolio of rentals perhaps they should look into splitting up the investment pool to many homes…

By: Jerrod Goode

Jerrod Goode — Tue, 29 Dec 2009 02:13:46 +0000

I would have to argee that more info would be needed to help point them in the right direction. A 30yr fixed product would probably work just fine for them, but it truly depends on their goals.

By: Launce Macomber

Launce Macomber — Mon, 21 Dec 2009 19:09:49 +0000

The case study begs for more details. Intent of ownership will dictate the best path. Assuming they will want to invest in potentially rentable properties, over the long term, the conventional fixed rate loan will be the safe bet assuming it meets reasonable cash flows. If they are looking to flip and make a quick buck as the market returns, an arm would probably make the most sense.

By: Jan Mundt (Henriksen)

Jan Mundt (Henriksen) — Sun, 20 Dec 2009 09:05:13 +0000

How do we define “investment” property? Are they buying properties to rehab then resell or buy to rent out? If the LTV works as a rental, I would recommend a 30 yr fixed if the property cash flows and meets investor guidelines. If their intent is to rehab and resell the property, I would broker to an investor that has an investment-rehab program.

By: richard martin

richard martin — Fri, 11 Dec 2009 17:26:28 +0000

Both appear to be in a good position to start their investment business and are not looking at commercial properties so I would think with their solid financial status they would be looking at a conventional fixed loan unless they are planning for short term,in that case then some kind of an arm.

By: Ken Ritter

Ken Ritter — Fri, 11 Dec 2009 01:00:39 +0000

If they are not looking to “flip” the homes I would recommend a traditional 30 yr loan. If they are however looking to flip the homes I would recommend an arm without a prepay.

By: Teresa Gallaher

Teresa Gallaher — Fri, 04 Dec 2009 21:20:15 +0000

If their scores and incomes qualify them, then they should do a conventional fixed rate loan. They want to look to keep their purchase price below the jumbo range in order to get the best rate and terms.