All Forum Posts by: AJ Exner

It depends on the program, the two that I am most familiar with will do 100/100 at 70% ARV but will underwrite pretty heavily and will treat it almost along the lines of a non-QM lenders and might even underwrite the builder/GC. Plus, they are picky on what regions that work in, which is another layer to look into.

The second group, with the right experience, does 10.5%-11.5% Interest only for 90%, and if the values come back in their valuation, will do a second on the down payment at about 17% IO so it balances out at 100% LTC. 

Its pricey in both time and money, which is why I usually express my hesitation to my clients with these programs because many people are willing, but are not able.

I know of 3, 2 that I work with the most for my clients, but what I have found is the inherent issues that come with them. 

There tend to be two big issues with 100/100 lenders that I have seen, the first is working with/being a borrower that is okay with the heavier lift that these types of lenders require. For a group like this, even with experienced investors, you have to prove that you have that experience which can take some time, and on top of that they tend to need a certain experience threshold within a certain period of time (usually 3-5 years). Those factors, plus the work needed to underwrite something like that, tend to make them trickier than say, a 90%/100% lender.

The second thing is ensuring that the values that they are operating under will work with 100% financing. Most 100% lenders will lend at 100% UP TO 70% ARV, which is tough to secure. Not only are those deals tricky, but you also need an appraiser to agree with the values needed to make a deal work, which, lets be honest, can be a bit of a crap shoot.

I know of a few doing it, but preparing yourself for the work of getting it is usually tricky.

Otherwise, **Following** to see if there are any others out there that I don't know

Hey Norma,

Have you done some rehab to it? What kind of leverage are you needing?

Hey Michelle,

Are you looking at 75% ltv on this loan or something a different? And are you hoping for a reduced PPP? You are right, there is some issues there with PPP in PA, but I do have groups with the credentials to have it. 

If you do go with them, you’ll have pretty competitive rates I would assume. 

Let me know if I can help, have a few different programs that could be helpful. 

Thank you,

Hey Wil,

A lot of information to sift through, but honestly I think your toughest element is the 'at or around 8%' right now. Yes, your standard mortgage rates are dropping, but most of your true commercial lending options are always going to be slow to react so I'm still seeing commercial rates higher than that.

Sent over a DM, but would love to talk through some options if you are interested.
Good luck!

Hey @Karolina Powell

When you are doing a handful like this, and to be clear I am 1,000% biased, but it might be good to utilize a broker. A good broker can communicate between multiple lenders and often times has established relationships within the C-suite levels of multiple lenders that they can make calls on your behalf to "shake some trees" and get things processed not just in a timely manner, but in a manner that is on time based on what you are trying to do.

Unfortunately it is not uncommon per se, but knowing where these hang-ups tend to happen and how to time everything based on lenders timelines and processes is where it can be helpful to have 'go to' lenders that you are familiar with, and they are familiar with you to help get things done.

Good luck though, happy to help where/if I can.

Should be fine with most groups. I am dealing with this situation with a client of mine where proving those payments is hanging up the refinance, so as long as it is clearly documented with the exact lease amount being paid over that time in the account, then most groups should be fine. 

Worst case you might need to ask for an exception, but I think as long as you are up front about it you should be in good shape. 

Good luck, if you need any help I would be happy to connect!

Hey Matt,

Most DSCR lenders are going to require a 12 month lease, but there are some that would be fine with month-to-month. However, if they do, they are likely just 'okay' with it and would likely leverage the 10-07 market rent analysis on the appraisal to actually calculate and determine the official DSCR during Underwriting.

Hope that helps, if you do have a tenant who is willing to be flexible, the 12 month is always the safest bet.

Hey Jeff,

I think fundamentally it is finding a group that says 'yes'. Finding an established group that finds a way to get deals done tends to be as helpful as anything as many of us have had experiences of weird and seemingly unnecessary denials.

I do like to make sure that its a region they lend to and the type of project that they do. Unfortunately, a lot of lenders tend to operate better with certain types of projects, which is also true in the inverse, that lenders that operate better with F&F or DSCR tend to struggle on the underwriting with other types.

Speed and flexibility tend to go with the ability to do deals well, but I think making sure that they are a lender comfortable and efficient doing the basics of the deal will help. Many of the other things (competitive rates and speed) tend to be more ancillary and preferential as long as the deal can get done without too many headaches.

Every deal is a bit of an adventure, but building a rapport with a group can really go a long ways to help get unique/quirky things done in the future.

Hope that helps!

Hey Tom,

As you can kind of see from the responses, there are still plenty of groups doing these, however Underwriting for them is still pretty tricky and you are going to run into minimum property values as well as minimum loan amount(s).

Most groups want to see properties all worth at least about 100k, but if they are below that and still cash flowing, you might still have a couple of options as long as the total loan amount meets certain thresholds. 

I will say, if you go in the direction of individual mortgages, you might be able to get higher leverages on each property (most blanket loans cut back leverage a bit even if you meet the thresholds) while also providing more flexibility in downstream options to sell/rehab/refinance each property without additional financial implications.

Good luck, if you need any help, would love to connect and talk through options!