Please Educate me in the Lending process. Its my weak point.

[Matt Nico]

Hello Bigger pockets,

I am hoping someone out there (or possibly a blog post in the near future) would be able to help me understand lending better. I have been in real estate for a while now, and I feel as if I have mastered most of the other elements of investing. To use David Green's BRRRR acronym, I feel as if I have very good skills at buying, rehabbing, renting, and repeating. Its specifically the refinance (or purchase to start) that is hindering my ability to really ramp up my portfolio.

I think my biggest problem that I have is not understanding a lot of the different loan packages available out there. Because I dont know what they are, I dont know what to ask for. There are so many that I seem to get tripped up on which one I want to use, and when to use it. I also would be interested to know what kind of interest rates are associated with different loan products. As an example, I know that traditional financing with owner occupied is usually the best in terms of money down and interest rate, where Hard Money is the highest interest rate. 

Could anyone give me basic information about these loan types. Which of these loans uses Income and credit for approval, a DSCR, and what interest rates could I expect to see with these loans:

Conventional Financing

Subject to

Investment loans

A Debt service coverage ratio loan

Commercial Loans

Thanks in advance,

-Matt

[Michael Thompson]

@Matt Nico Subject to isn’t a loan. It’s an acquisition strategy. You can buy any property subject to any lien still attached to the property. Those liens can be anything from the mortgage to the water softener.