All Forum Posts by: Adam Windham

Always market and deal specific, but yes the higher interest rates have made fewer deals pencil out. That being said, if you can find a deal that works in a downmarket you'll likely be in that much better of a position when things turn around. You should have some tailwinds next year with interest rates anticipated to be trending down through 2025. 

Welcome to BP! And congrats on starting your investing journey!

@John Jacobs yes most DSCR Lenders require at least one member of the LLC to be the personal guarantor. However you can structure them if you have Limited Partners (LPs) that just provide capital so that those LPs do not need to have their credit pulled or sign a personal guarantee.

Hi Jordan - we offer a variety of investor-focused loans, including DSCR loans for Short Term Rentals and Long Term Rentals, Renovation and New Construction loans and Bridge Loans. Our minimum loan amount would be 75k however. Let me now how we can help.

if there is a value add component a hard money lender is probably the way to go, you're going to want something short term anyways so you can refinance of the new increased value once the improvements are complete. 

if there is a value add component you might be able to find a local or regional hard money lender that would allow a seller second behind their first position lien. No DSCR based lender will allow this. Possibly some kind of conventional product would allow a second position lien, but even those options have cumulative loan to value limits that you cannot exceed so 100% financing would be difficult to achieve.

Definitely drill down and look at the comps in AirDNA and see how they are performing and try to select the properties are the most similar to your property. 

If you want the new refinance loan/LTV to be based off the new appraised value, generally need to see 6 months of ownership seasoning, but can also get exceptions that will allow 90 days of seasoning. If you're refinancing before those time periods, the LTV would generally be off the purchase price + the documented improvements. For an single family, the max LTV would be 75% for a cash out and 80% LTV for a rate & term refinance.

Agreed, you can use a DSCR loan and have it underwritten using the projected short term rental income (AirDNA, Rabbu, etc) since the property wont' have any history. Its true that 6 months is usually the seasoning period to use the new appraised value for LTV/loan amount purposes, but generally you can get exception approved if you are close to this 6 month mark.

Pre-Fab homes should not be any more difficult to finance than regular stick-built provided it meets the same requirements. This is not to be confused with "manufactured/mobile homes", those are a different animal. The thing you will need to look out for with pre-fab is the draw/payment schedule from your pre-fab company. Typically they require an initial deposit and then subsequent payments along the way, and most construction loans only disburse when the items are on-site/installed. So you could end up with a cash flow issue, where you need to advance funds to keep the pre-fab process going before you can submit a draw request to get reimbursed from the construction loan.