All Forum Posts by: AJ Exner

Quote from @Paola Astrid:

Have some cash on the side that would like to deploy on another property. I don't want to liquidate my stocks to buy it full cash and so I'm looking for a DSCR loan. Appreciate any tips as well!

Hey Paola,

Do you currently have a tenant in the property? Just make sure you have proof of rental payments if you do from the last couple of months and you should be good to go no matter what direction you go.

Good luck!

Hey Rod,

Congrats on where you are at! As the great philosopher once said, "mo' money, mo' problems".

I think the reduced leverage plan is a good choice to free up some DTI but obviously the extra fees on DSCR could start to add up a little. I guess my question would be, if each deal would cost an extra 2% going DSCR would it be worth it to be able to scale and accomplish what you are hoping to accomplish? Feels like the most straightforward plan to get from point A to point B and sometimes it pays to KISS

Acknowledging that I don't know all the numbers you are working with, but if each deal costs an extra $3k-$5k, but because of the efficiency of DSCR loans and the ability to ignore your DTI, you could maybe squeeze an extra deal or two a year in? I guess that is where hopefully the LOC could help you there.

Could you pair the LOC up with a DSCR lender? Use the LOC from the CU for the purchase of new properties?

I don't know, certainly takes money to make it, but I would worry about when the CU would start saying 'no'. Rate seems about right, so I wouldn't get too hung up on that (DSCR would be about there too, maybe even a little less based on that leverage).

Sorry, a bit rambling there, but would be happy to connect and talk through things if that would help? Happy to assist where I could.

Good luck!

Quote from @Gene Hacker:

I am looking for a lender that works with rural properties in California.  The property I am trying to refinance is in town, and in a neighborhood and just up the road from the regional hospital but I guess the local population is low enough that it is considered rural for some lenders.  

I am hoping for recommendations of lenders that lend in rural areas like this.  

Thanks!

Hey Gene, 

Have you done an appraisal in that area before? If you have an appraisal from your purchase, a lot of lenders will go off of what the appraisal says (Urban, Suburban, Rural) as much as anything.

Otherwise, any lender that would do it would likely be at 65%. Unless it is a Short-Term Rental in a desirable area, then some programs might include it anyways.

Happy to take a look if it would help

Hey Noey,

The way I see it would either be a bridge (depending on how low) which wouldn't necessarily satisfy the 30 year stuff or getting creative on a 30 year.

You could bring on a person onto an LLC to act as a credit partner and to find a lender that would utilize their score for pricing. Another option that I know of that would cap you at 50% LTV.

So as long as the value is there (minimum loan amount = $75k), then you should be able to get something out of it.

Happy to help where I can, good luck!

Quote from @Ram Gonzales:

I have a property in Austin that I acquired recently for cash. Value is $475K+. Looking for an asset-based lender for an interest-only loan of around $250K for up to 5 years. I'm leasing to a family member for minimal rent, certainly no where close to market, so I don't think it would work for DSCR. I plan to use the proceeds to purchase another property. Any ideas of lenders who could do this? 650 credit score.

Ram,
Actually, I think you are really going to struggle to find a lender for a deal like this, but not due to a lack of options.

Analyzing the situation, I see a couple of potential lender implications that would make it tricky from a lender's perspective:
-Having it not DSCR is a decent sized hurdle to overcome, and in TX it is a little trickier due to the higher than average property tax. Having that tenant in there helps, but the other issue is..
-Leasing to a family member. Its a little thing, but for a lot of lenders if they are aware of that fact they won't lend. This is because most people would rather lose the property than lose the relationship with their family member
-That's a decent amount of money to payback, especially on a 5 year balloon. You would really need to show some kind of a payback/refinancing strategy to make most feel comfortable
-The 650 credit score is tricky as well, not impossible, but tricky.

Its a tough spot, but its especially tricky when you compound issues. I think there might be some options, but it might not be what you are hoping.

Good luck! Happy to help where I can.

Quote from @Tyler Herman:

Quote from @AJ Exner:

Hey Tyler,

I know of a few that require a certain leverage on the lower amounts, and I'm sure they would want to know your experience in spaces like that. That being said, I can certainly work within the 90k-120k refi.

Depending on the area, I'm not surprised that banks/CUs would struggle. Just shot a DM, happy to help if I can.

Good luck!

Thanks. Yeah the DSCR out is a lot easier. It's the initial loan that's more the issue. Would be nice to work with one person for both.

Totally understand,

Generally that initial purchase-rehab loans will also be driven by your experience in the area. So any additional exceptions, whether for purchase price or even total loan amount, would be more likely if you can show a healthy SREO. 

Hey Tyler,

I know of a few that require a certain leverage on the lower amounts, and I'm sure they would want to know your experience in spaces like that. That being said, I can certainly work within the 90k-120k refi.

Depending on the area, I'm not surprised that banks/CUs would struggle. Just shot a DM, happy to help if I can.

Good luck!

Quote from @John Semioli:

Hello, community! I'm looking for advice on refinancing a STR property in Pennsylvania. About a year ago, I took out a mortgage and recently added significant value to the house. However, I'm hitting a roadblock with traditional lenders, as my loan-to-value ratio (LTV) isn't matching their criteria. This seems to be a result of some smart accounting moves on my part, thanks to an investor-savvy accountant. As luxury vacation short-term rental hosts, has anyone faced a similar situation or have suggestions on how to proceed? Our goal is to pull out some of the rehab money we put into the property. Thanks in advance!

Hey John,

Sounds like the answer would be to utilize a DSCR lender that utilizes either pre-established STR rental income (if you can prove with AirBNB/VRBO statements) or a few that are still UW with AirDNA or a similar STR income projection program.

I am aware of a few still doing it at this time, and if you can show that you know what you are doing you shouldn't see much of a cut in LTV if at all.

Happy to connect and see if we can help.

Good luck!

Quote from @Maurice Smith:

Found a good hard money lender but they don’t lend on anything above 4 units.

any recommendations for some good hard money that lend on 5+ units in the  Ohio area  or nation wide would be appreciated. 

Maurice, 

Most are going to specialize in 1-4 units (as I'm sure you've come across) and within the ones doing 5+, you'll have to keep an eye on minimum purchase price/loan amounts and even minimum price per unit.

Do you have any experience doing 5+ unit rehab? That might help if you had.

Just shot a DM, happy to help where I can.

Thank you,

Quote from @Philip Jones:

Hey guys I am a Landlord out of Metro Detroit area. I am wondering who has done the BRRRR method as an investor and what institutions are investor friends for multiple BRRRS. Should I check into local smaller banks here or Credit Unions?

 Hey Philip,

It’s kind of tricky up in Det. I would check with a few different groups to make sure that they can operate in Detroit, and also to make sure that they will lend to the property in question based on the value. Many groups will have minimum property value/loan amounts that will probably need to be upfront with.