All Forum Posts by: AJ Exner

Hey Jamal,

So most DSCR programs are going to require, at the least, a 'soft' pull of your credit, just to mitigate their risk when it comes to long term debt. But primary ownership and income are not necessary.

Are you also hoping to rehab or just buy and hold? Credit requirements will shift pretty considerably based on the type of loan you are going after.

 Rahnesha,

There are definitely a few hard money lenders that can do that, but you would want to be wary of fees upfront, especially if a HELOC is available. The advantage is that with Hard Money it would stay off of your personal credit.

There are also options of getting additional money out to help cover the renovations up front, and then doing a draw post-completion to recoup that money to then potentially draw it into a cash out refinance on its new value.

 Hey Kori,

This came across my feed and I wanted to see how things went with this? I have a client that was able to do a 75% cash out on a bridge to start showing STR income which they will convert to 30 year fixed once it is established.

Hope you were able to find what you were looking for!

Luther, 

The hang-up is usually in underwriting the income. There are a few that utilize things such as AirDNA to assist with that, but generally seeing that proof is a good way to overcome that as the lenders that do that will usually do an 80-90% cut on what AirDNA says.

I have some clients that will do a 12 month stabilized bridge at 70-75% of the new value to get out of the 'Construction' or rehab bridge and still get some cash out while they are making money on the STR income.

Hey Ben,

Saw this pop up and wanted to see if you were able to hone in on anything. There are so many options in this space and it can become a lot really quickly, and usually every program varies on those different perks that you mentioned, not to mention having other perks like deferred interest payments.

Are there some ballpark terms that you are hoping for?

Hi Stephanie, 

It sounds like you are in great position with your portfolio! What type of plans do you have for the future of you and your portfolio? If it is just to continue to purchase more properties and continue to invest, there are a lot of options for you. 

Are you hoping to keep your financing through more conventional lenders or are you thinking more private/hard money? Each have their advantages and disadvantages as you continue forward.

David, 

Each lender, especially in the Hard Money space is going to differ based on the property type that they want to go after. Different capital market Hard Money lenders have unit 'caps' on how many units they are comfortable lending to, such as many are uncomfortable lending to more than about 4 units. 

As well, many might even include a price per unit minimum that I would confirm as you begin those conversations.

On the flip side, keeping the property that you are looking at below about 10 units will tend to maximize your cash flow without killing you on the rate. HIGHLY recommend Hard Money as you begin to expand.

Hey Ben,

I would echo what everyone else is saying as I believe we are hoping for rate stabilization rather than a decline. I would inquire with the lender that you are speaking to and see if maybe they have an interest-only option as well as the buy down. 

You might be able to save a little money on the front end by doing an interest-only program for a couple of years while rates are higher and partner that with a reduced prepayment penalty. It could optimize your cash flow right now and put you in a position to do a rate and term refinance here in a couple of years.

 Hey Jonathan,

I am aware of one lender that can do it, but they would still require 10k down, but fees are reasonable. Are you hoping to purchase without an appraisal or would you be okay doing those as well?

I have a couple of friends and clients who have tried them and, from what I've heard, similar experience to what @Amere Mack had experienced. The product is real and solid, but getting to the finish line might be a little tough, especially on anything long term.