need help on analysis for current lenders options for investors

[Trish Wilson]

I just watched the video of David Greene for the 90 day challenge which was very good. Thank you David. As I am trying to help investors here in Idaho find the right passive income investment properties for them, I have to deal with lenders who are giving a higher interest rate like 8% or so. A 40 year loan with interest only payment options for the first year or first three years. And a downpayment of 20-25%. 

Using your rental calculator, the title company's calculator and online calculator, it is quite difficult to find a more accurate number. I am getting negative cashflow on almost every property. Unless, there is a way to do analysis better or I am not finding the right investment property.

Is there anyone in this group, who has encountered the same situation? Or is there anyone who can help us figure this out properly?

I would appreciate any feedback or sharing of your own experience on this matter.

TW

[Grant Schroeder]

Thank you for posting @Trish Wilson! It sounds like the loan solutions you are looking at for investors are DSCR loans. These can have 40 year options that are 10 year I/O followed by 30 year amortization all at a fixed rate for the 40 year term. They typically require 20-25% down minimum and have rates right now in the 8s like you have found. The time to use this is if an investor cannot DTI qualify for a conventional loan solution with lower rates, or if they are past their 10 financed property limit.

If you utilize an Academy Investor loan, your clients can put as little as 10% down with no MI on a 1-4 unit investment property, and rates are in the 5.75% - 6.125% range. This is a loan that is portfolio'ed on Academy's books, but is underwritten per conventional loan guidelines.

I would be glad to hop on a call and walk through these details with you if that would be helpful? Please let me know what is best for you!