All Forum Posts by: AJ Exner

Quote from @Nick Gauss:

Hey everyone,

I posted a few weeks back on any suggestions for an aspiring flipper/long term investor. You guys kept me motivated so I've been on the search for deals in my area. I ran across a for sale by owner sign and got to researching that night. The next day I went over and tried calling the number but it was disconnected so I knocked on the door multiple times with no answer. I drove away but then I figured I'd loop back around and try the back door. I was able to get a hold of the owner and get a tour of the home. As I expected from the area/researching the old listings, it needs work but nothing major. I think this could be the perfect first flip or a home that I could utilize the BRRRR method. We spoke at the beginning about what he wanted for purchase price but by the end I was able to talk him down to what I think is a workable number. Needless to say, I may have found my first deal.

I was hoping to get some insight again from the community here on where/what I should do for financing. I am torn on whether or not to utilize the BRRRR method or flip this one. Is this something that a hard money or private loan would be best for as I'm undecided? Then my understanding would be that I would be able to go to a local bank and ask for a cash out refinance after it's renovated/rented if I decide to go this route? Any advice for my situation or general advice for someone just getting started would be greatly appreciated. Thank you in advance!

Hey Nick,

Congrats on taking that first step! Is the property there in Madison, or did you track one down elsewhere?

As for your question on Hard Money Loans, yes they will generally cover a portion of the purchase price (say 80-90%) and most will do 100% financing of the rehab based on a reimbursement/inspection schedule

That is usually the toughest part as you get started, most will want to see you do the rehab first, and then do a 'draw' in order to get the funds back. This usually does not include ordering the supplies, so they like to see it completed before the full funds are reimbursed.

Most HMLs for first timers will tweak initial leverage based on FICO and the area you are investing in. If its a good area, a good deal, and your FICO is good, then that will put you in the best position for most groups.

I hope that makes sense, happy to connect and discuss further.

Good luck!

I think a lot of gotten burned out there from the last few Hurricane seasons and with some revamped FEMA replacement guidelines it really has impacted the coastline, i.e. all of FL.

Combo that with insurance difficulties out there, I think there is a LOT of reconsideration from capital markets that are going to impact it. The Kiavi decision could really shake up things up, either as a precedence or to open the door to new lenders to take their place out. 

For the groups that do stay, it wouldn't surprise me to see leverage-based changes to their lending policies specifically for FL properties and maybe capping Loan-to-ARV?

*Insert Shrug Emoji*

Hey Emmanuel

Have you considered treating this as a modified-BRRR strategy? Attack it with a small rehab-bridge loan (coat of paint, fix some drywall, clean up landscaping/curb-appeal, etc.) to increase leverage and reduce your down payment.

Then refinance it after a couple of months at the true "ARV" where you should be in position to at least rate and term at 80%. It could ensure that you've minimize your cost-basis while getting what sounds like a good property that should give you some good equity for a long time.

That seasoning period should suffice in letting it 'appreciate' to its actual value and put you in a great position.

'Best' terms will vary pretty considerably based on your experience, FICO, and the numbers themselves. Is this your first flip or have you done a few of these already?

Are you doing it in cash or are you using a lender to help with the purchase/renovation? If you are using financing, ask your lender if they have a template they prefer.

Some groups don't care, but some can be very particular, so I would ask them if they have one.

Good luck,

Quote from @Patrick Roberts:

Quote from @AJ Exner:

Quote from @Patrick Roberts:

Quote from @AJ Exner:

@Kaushik Sarkar

There are not many, but I do know of one that is doing pretty good work at 70% leverage right now. They just redid their legal wording to help ensure non-recourse for SD-IRA.

Just sent a DM, would love to connect and help if possible.

Good luck!

70% LTV on nonrecourse? That's wild. Is this a newer product for them, or have they been doing this for a while?

Yeah, they had some wording during 2024 that made it "non"-recourse (my wording, not theirs) but had some limitations even with it being eligible through an SDIRA. 

That being said, they shored up the language and have made it a great SDIRA non-recourse option that is top of the line at maximizing that kind of leverage.

And we definitely agree, I wish I had more clients that knew of the kind of benefits something like this provides!

Interesting. Typically nonrecourse debt caps around 55-60% LTV. This is the first lender I've heard of going to 70%.

We were taken aback as well, but they are a premier lender in the DSCR space and have maintained that. Plus, with their rewording, they have even somewhat reinforced the program as the needs have continued to develop.

Happy to provide more information if you are interested and would like to connect!

Quote from @Patrick Roberts:

Quote from @AJ Exner:

@Kaushik Sarkar

There are not many, but I do know of one that is doing pretty good work at 70% leverage right now. They just redid their legal wording to help ensure non-recourse for SD-IRA.

Just sent a DM, would love to connect and help if possible.

Good luck!

70% LTV on nonrecourse? That's wild. Is this a newer product for them, or have they been doing this for a while?

Yeah, they had some wording during 2024 that made it "non"-recourse (my wording, not theirs) but had some limitations even with it being eligible through an SDIRA. 

That being said, they shored up the language and have made it a great SDIRA non-recourse option that is top of the line at maximizing that kind of leverage.

And we definitely agree, I wish I had more clients that knew of the kind of benefits something like this provides!

@Kaushik Sarkar

There are not many, but I do know of one that is doing pretty good work at 70% leverage right now. They just redid their legal wording to help ensure non-recourse for SD-IRA.

Just sent a DM, would love to connect and help if possible.

Good luck!

Quote from @Ron Amshalom:

Hey everyone!
Asking because I'm at the beginning of my real estate journey.

Finding the right lender can be tough—especially when the deal requires creative or highly tailored financing for the investor.

How do brokers or consultants source these lenders if they don’t already have personal connections?

Asking because I'm at the beginning of my real estate journey.


Thanks in advance!
Ron

Hey Ron,

Personal connections tend to be a vital first part. Good firms are going to conferences hosted by AAPL (American Association of Private Lenders) and others to connect and form reliable relationships that will benefit their clients. 

Unfortunately, not every broker is good and often times it comes down to their ability to coordinate and ask for help from certain lenders in order to get a deal across the finish line.

On the flip side, not every lender likes working with brokers. But if you get a good one that has done enough volume with good, reputable lenders then often times they will be able to get deals that you wouldn't be able to get anywhere else. 

Hey Billy,

Definitely seeing it get done, but usually with either a leverage cut (~65%), a healthy STR income, or both.

With a good FICO, healthy STR income, maybe another STR in the area showing capability, and a good FICO, it should be doable. Have you experienced just a lot of flat denials or have you been sitting on the bridge loans?

Honestly, the other issue I've seen is on the truly unique STRs (log cabins, yurts, etc) struggle to get financing regardless of all of those. Still somewhat possible, but certainly tricky from a DSCR lending perspective.