First Deal Advice
First deal is in the works, but I'm getting some conflicting opinions regarding financing and exit strategies.
1st - I've spoken to a mortgage broker a few times, but I don't have confidence that he'll be quick about things so I can get a deal done. We buying a bank-owned property through a realtor at a great price. The realtor (Who also invests) referred us to a mortgage banker, who he works with and in his words "can get the deal done". I don't want to pay to much for the loan, and also want to get into this with a little money out of pocket as possible. Any advice on mortgage bankers vs brokers?
This info can impact my second question:
2nd - Since this is our 1st property, we wanted to flip it right away (we're estimating about $20k profit) to generate capital for our next one. Realtor-friend says "hold it and rent it, that area will be worth 50% more in a year - take out a credit line or refi for capital". Mortgage banker says "flip your 1st couple props".
FYI: estimated monthly cash flow is $250-$300, depending on actual loan costs, actual insurance, etc. Mortgage banker is suggesting a 203k loan, and I asked for double what I think the repairs are. Don't have an estimate for repairs yet. Realtor-friend says "clean it, fix the holes in sheetrock, paint it, carpet it and rent it next month"
Bottom line: I don't want to the financing for this 1st property to inhibit a future deal by being unable to refi, credit line or flip within 3-6 months.
Thanks.
You might need to ask a specific question here in order to get some help. You've done a great job summarizing what everyone has said but it's still a little unclear to me what your actual question is.
It sounds like the realtor and the mortgage broker both have valid points. Now you need to decide what going to work for YOU, since it's your behind on the line. Decide what YOU want and then pursue that avenue. I'd talk to another mortgage broker if you are unsure about the current one.
Ryan J. Schnabel
Thanks, Ryan. After reading back through - I didn't actually ask a question.
I guess wanted to hear some other opinions about working with mtg borkers vs bankers, and what I should look out for as new investor working with each.
The other question is purely personal: my wife wants to flip immediately, and I want to rent for at least a year. We have to gather and organize our numbers and present to each other, I guess!
A mortgage banker funds his deals internally. A mortgage broker uses multiple sources to fund loans,and can find lenders who are more flexible with their terms.