All Forum Posts by: AJ Exner

Hey Christina,

There are a few that can do cash out refinancing at values that low. The issue is that you will want to keep good tabs on the fees because you will often run into minimum fee sizes and so you won't have as much wiggle room or negotiating power at loans that small.

Happy to connect and help if I can, certainly to walk you through the numbers!

Hey Mike,

6-units should be doable, I'm guessing you are looking more along the DSCR route on it? Do you already have it under contract and have the financials behind it?

Shot a DM, happy to see if we can help.

Hey Cecilia,

A few recommendations, for what they are worth.

Definitely want to keep an eye on the specific purchase price and loan minimums. As well, in a few of those markets (Detroit/STL) if the rehab exceeds the purchase price as you get started, there might be lenders that would deny the loan based on that. So either vet that out if you can with the lender beforehand, or work with a good broker who knows the mechanisms and market well.

I would also recommend keeping the Multi-Family to 2-4 units if possible, especially as you get started. You will see a drastic reduction in lenders willing to lend to 5+ unit rehab deals, especially for folks getting started. Keeping it 2-4 will keep it under the same 'bracket' and keep leverage/rate manageable. 

Out of state can be really tricky, so finding good Contractors in that area will probably be the trickiest but the thing that can make the biggest difference. 

Good luck! Happy to help if and where I can.

Yeah, finding the right partners once you've identified your 'buy box' is key. There are DSCR lenders going down to ~$60k-$65k properties and even lower if you portfolio a few together, but being aware of who they are, where they operate, and how they do things is really important.

Regardless, most still want to see some kind of 'skin in the game' though. I think the biggest mistake I see is inexperienced investors asking people to do the deal 'for them' because 'the deal is so good, why would they not?'.  It's still important to maintain a good FICO, be willing to bring a reliably sourced down payment, and have the skills necessary to maintain a good, well performing portfolio. 

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!