All Forum Posts by: AJ Exner

Hey Blake,

Congrats, that sounds like a great start. Without knowing the specifics of how you guys structured the PML, I would recommend having him put a formal lien on the property for the 52k if they haven't already. 

What that does is give you the flexibility that if the appraisal comes in a little lower (not sure if the $155k is the ARV appraisal or the stand-alone now that its finished) that you can set it up as a 'Rate and Term' Refinance and makes sure everyone gets paid off. Always good to pay off debtors first.

If you don't have a lien, and the appraisal comes in lower, then you are capped at 75% rather than 80% on a R&T which might leave your PML a little short

Otherwise, it might just be "cross your fingers and hope for higher appraisal" category. You're looking at 75% cash out on $155k ($116k), which wouldn't leave much after closing for the modular. 

Hope that makes sense, good luck!

Absolutely,

So I would classify this with my clients as a 'Delayed Purchase' or an 'Unseasoned Refinance'. Most groups could do that + still set you up with an escrow to repair the foundation which would still put you in position to BRRRR it in a couple of months even after that into a 30 year fixed if the value add is decent enough.

Are you looking to do something like that, or more along the lines of just stabilizing it under a 30 year fixed from the beginning?

And as 'silly' as it sounds, I think there are a lot of investors that have the ears of state/local legislators that would keep anything drastic from happening. The turnover is a legitimate concern and one that could stall things a bit. 

Fortunately if anything happens at the national level that pawns it off on state level, Missouri just finished their session so you should have at least one more year before we would really have to worry about anything.

Hey Gary,

So it would involve two closings, but there are a handful of Hard Money Lenders that you could refinance based on the existing value in the property along with a rehab escrow to reimburse you the money as you fix it up. 

Plus with it being a HML/bridge loan, you could refinance again once its fixed based on the After Repair Value and try to make the most of it. Of course, being at the mercy of appraisals/comps does stink, but its a part of the game and you could end up on the other side of things and get things to line up and keep more cash in your pocket.

Good luck though, happy to connect and help if it would beneficial.

Hey Johnathan,

Your guess is as good as mine. If I had to put money on it, the current administration has made it a focus to get more and more into the hands of the individual states and this seems like a big enough space that it would make sense to do the same.

Of course, if the administration treats this like they did issues like Abortion and immigration reform, then I would see a wide-variance by state to determine budget, limitations, and amounts. 

Given what I know about the leadership up in KC (based just south in Springfield) it would be hard to imagine a complete 'drying up' per se of Section 8, or Section 8 adjacent, funding to help alleviate the housing crisis in the area. I could see potential 'limits' to the terms of a single section 8 tenant where they are only allowed to be on S8 for a set amount of time and would then be required to make a change. But as for a complete redaction of that in KC, it would be hard to imagine.

Of course, I could be completely wrong, so we'll have to see

Hey Ron,

There are certainly some intricacies to being a foreign investor and working everything out.

Usually the first two questions are 1) What area are you looking to invest in? And 2) Do you have a qualifying US FICO score? There are options no matter how you answer those, but they will vary considerably on rates, terms, and leverages.

Good luck as you start your journey! Happy to help however I can!

Rural can certainly be tricky, especially knowing appraisal tendencies and leverage cuts on long term stuff.

Happy to connect and see if I can help!

Hey Dave,

Based out of Springfield so very familiar with the Branson market. Shooting over a DM, would love to connect and see if we could help. 

Evan,

You guys do sound like prime candidates for DSCR style lending as you continue to expand. To answer your first question, many DSCR transactions happen with mobile notaries or I've even closed a few at foreign consulates so that wouldn't be a problem.

I'll try to tack each question one by one, you could leave them in personal names, but it is not preferred and that is both lender and state specific. Some lenders require that it is done in some kind of entity depending one what state the property is in.

Most DSCR lenders would require that insurance, so you would want to confirm as you get started.

The only other thing that pops out to me is to be aware of varying Prepayment Penalty requirements in Pennsylvania. DSCR loans are going to usually have a set period (usually 3-5 years) that they would apply a small financial penalty for refinancing or selling before the 3-5 years is up. Pennsylvania is a little different and a lot of lenders have no-prepayment penalties in PA but you might have to pay some points or see a rate increase because of that. There is also a Transfer Tax that Pennsylvania requires that is always a 'fun' reminder on the final HUD.

Good luck as you guys are working on expanding your portfolio, happy to connect and help if I can!

Hey Ryan,

Originally from Bentonville, grew up there, and between the multi-billion dollar Art Museum, world-class biking trails (including the new one that is going to look like a ski-lodge in Bella Vista) and all the work that Wal-Mart is doing to build up their new campus, Bentonville/Rogers is probably your primo spots to start if you can break into the market (high prices and not slowing down).

You've also got a very fast growing medical corridor developing along I-49 down Rogers-Springdale-and into Fayetteville. You'll see a much better MTR approach along there as the need for medical professionals will only continue to grow.

Plus, you always have the Razorbacks in Fayetteville and the need for housing there.

Good luck though, it can be a tricky and competitive market. Build yourself a good, knowledgeable team, especially a realtor there, and you could certainly make something happen.