Interest Only Lenders / Loans for Long Term Rental Investing

[Rich Solano]

I am looking to purchase a few rentals properties on deals that came in through my direct seller marketing. I intend to buy them 10-30% below market value through my LLC.

CoC return on these condos are from 12-15% with a cash flow of anywhere from $3-400 / month if going the traditional financing route. Purchase prices are between 105k-140k.

I am considering doing interest only loans to increase cash flow. Can anyone recommend a lender that they have personally used to implement this strategy? Has anyone utilized this strategy for a longer term and have any feedback? 

[Nate Herndon]

Quote from @Rich Solano:

I am looking to purchase a few rentals properties on deals that came in through my direct seller marketing. I intend to buy them 10-30% below market value through my LLC.

CoC return on these condos are from 12-15% with a cash flow of anywhere from $3-400 / month if going the traditional financing route. Purchase prices are between 105k-140k.

I am considering doing interest only loans to increase cash flow. Can anyone recommend a lender that they have personally used to implement this strategy? Has anyone utilized this strategy for a longer term and have any feedback? 

I utilize 5-year, 7-year, and 10-year interest only DSCR loans for clients who are needing to meet a 1.00 DSCR threshold in underwriting and/or want to maximize cash-flow like yourself.

These loans are all 30-year terms. A 10-year interest only, for example, is going to have a fixed rate for 10 years and you will not make principal payments during that period. It is actually a 10/1 ARM, so after the first 10 years the rate will adjust once per year for the remainder of the 30-year term. That adjustable rate is also amortized over a 20-year timeframe for the last 20 years of the 30 year term.

Truth be told, most will refinance their 5/7/10 year IO loan before it ever reaches the adjustable rate period. All that to say, what you desire is out there. Rates are in the 7.5-8.5% range. Feel free to shoot me a message to connect and discuss further.