💰Maximizing Financing: From Down Payments to Lender Options

[Jorge Abreu]

When it comes to real estate leasing, leverage is key to making it big. It's like getting a power-up that makes your spending power and returns even stronger. Trust me, leverage is a game-changer that can speed up your path to wealth.

The down payment is the most important part of getting a loan. It's important because it affects how much money we can borrow from lenders. We won't settle for just any deal, though. We are putting everything we have into trying to get the best financing terms possible.
Okay, we already talked about Loan-to-value (LTV), which is a way for lenders to figure out how risky a loan is. It's all about comparing the loan amount to how much the house is worth. Lenders also want to know that the property will bring in enough money to pay back the loan. The debt payment coverage ratio (DSCR) helps with that. Also, guess what? We can talk to the lenders about these numbers and find a good middle ground.

Lenders often put other limits on loans besides LTV, like the DSCR. It's important to understand these limits and work with them so that our financial goals can be met. We can talk about things like the rebalance test time or the required equity contribution, for example. Believe me, even small changes can have a huge effect on how much money we get.

In the real estate investment business, it's important to build ties with brokers, lenders, and direct contacts. Over time, we've built trusting connections with many people. For tough deals, we have go-to lenders and bridge lenders, and we have agents who know what we need and fight for us. We can get a lot of different types of loans through these connections, which makes the whole process go very smoothly. So, yeah, it's very important to keep these ties going and make sure they're good for both sides.

When you deal in real estate, money is an important part of the puzzle. By using more leverage, negotiating like a boss, and keeping those priceless relationships strong, we can get the most out of our financing choices and open up new doors. When it comes to making deals, the more you know about banking, the better off you are. 💥