All Forum Posts by: 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!

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.

Hey Kevin,

Is this your first time rehabbing in IL, and is it in/around Chicago? You might run into some issues if this is your first foray into that area as most lenders are going to either cut leverage, if they lend there at all.

You will inevitably find someone who can help you, just make sure to vet them as much as possible going into the deal to ensure that you don't get down the road and something that could have been avoided keeps the deal from happening.

Happy to help if I can

Good luck!

Hey Jesse,

There are a few programs that you can refinance into a bridge loan (1-2 year term) with no prepayment penalty where you can payoff the HML and get some more time to sell/unload.

Just shot you a DM, would love to help you walk through the process if you would like.

Good luck!

For sure, plenty of options up there.

Just keep an eye on loan minimums up there because depending on what part of STL you're in it might come in below. 

Quote from @Charles Wade:

Greetings and thank you in advance for the assistance and advise

I purchased my first STR using a conventional loan and in my name two years ago. The loan was 90% LTV with PMI. The property is now a STR for a year and it has already been transferred into a land trust owned by my LLC.

What I am looking to do now is to refinance the mortgage and remove the PMI as well as have the loan under the LLC and not me personally

1) Is this possible?
2) How?

3) Who?

Hey Charles,

I would certainly lean DSCR as well, as mentioned above. The biggest factor that you need to take into consideration is that wherever you go for your refinance, that they are comfortable with two elements of your deal; the trust inside the LLC and the fact that it is a STR.

The land trust shouldn't be too big of an issue because it is owned by an LLC, but you definitely want to ensure ahead of time with the lender that they are okay with that kind of entity structure. The last thing you want to do is get an appraisal, move into final underwriting after weeks of work, only to get denied because of how things are structured.

Secondly, and almost more importantly, you want to make sure your lender is comfortable with it being a STR. The biggest part of a Debt-Service Credit Ratio mortgage is that they want to calculate the income of the property vs. the debt on the property incurred and there are a decent amount of lenders that are not comfortable underwriting the income of a property as a short-term rental. There are plenty that do, especially in showing a year of income production, but you want to absolutely make sure before you get in too far.

I'm happy to give some recommendations if you would like, shot a DM and would love to connect.

Good luck! 

Hey Rebecca,

How many units are they? Shouldn't be too much of an issue to find funding if they are 2-4 units. 5-8 unit rehab deals are trickier, but anything running at or above 10 units definitely becomes trickier, especially in 'undesirable' areas and depending on the specifics of the financials.

Is this their first time taking on a project like this as well?

Hey Drew,

You're right, a lot of opportunities. The biggest thing is finding lenders/programs that are good working with those lower amounts and understand the opportunities that are there.

I have a lot of clients doing it right now, and depending on that number I feel like those rent numbers are even pretty low. A lot of mid-sized towns offering up great, stabilized rents that produce great cash flows, even at higher rates. 

Quote from @Ben Gradert:

Hi, I'm in the process of purchasing a home for all cash (100K), 80K rehab, and then a post ARV of 315K. Is there any way to cash out refinance a home where you can leave something less than 20% in the home?

Thank you!

Hey Ben,

Sounds like you are needing to refinance to be able to purchase this new deal. Is there a way to refinance at 'normal' max (75%) and find a purchase/rehab lender that is more flexible with reserve requirements or is better at creative financing (ie seller financing, etc.) that could help you make that deal happen without over leveraging your other property?