All Forum Posts by: Kevin Hill

@Michael Conte

Michael - lots of good feedback from others on your question.

1) You can get perm financing on these at 75% cash out without changing ownership (keep them in the LLC)

2) 30 yr fixed at 75% with Cash out would be around 4-4.5%. Lower if you pay discount points (down to 3.75%)

3) you could do individual loans or blanket, individual gives you more flexibility to sell/refi as need on each property.

4) you will need 6 months seasoning before the new value can be used for the 75%. If you had debt the seasoning is shortened to 3 months.

Happy to connect with you and others following this and put you in touch with the right person to get these loans done.

Having a hard time finding a value-add project to flip or hold as a cash flowing rental? Here are properties in the Dayton/Cinci area going up for auction. There are several cash flowing multifamily properties available including a 48 unit (bellbrook), 30 unit (watervliet), 16 unit (smithville), 4 unit (Pelham). Several SFRs ready for rehab and already stabalized. Browse the details here:

https://bid.auctionbymayo.com/...

Aloha Capital is happy to consider financing the buyers purchase and/or rehab budget. Email [email protected] for financing. You must bid via the online auction, Aloha Capital does not own these properties.  

Hi @Bhanu A., one way you could free up some slots for traditional mortgages would be to take cash out of one or more properties and use that to payoff other properties so that they are free an clear. This would only be feasible if the properties have substantial equity that would allow for a complete payoff of one or more properties. Financing the properties in an LLC wont typically avoid the issues you will have with too many financed properties because the properties will still come up during the underwriting phase

@Brett Danehey There are some lenders out there that do not qualify based on your DTI but rather the DSCR (Debt Service Coverage Ratio) for the property. As the others have pointed out, the rates will be higher than what you are seeing from FNMA/FHLMC lenders but that is just a reflection of the risk associated with the deal since you don't go through a traditional underwriting process. Minimum DSCR is typically 1.0 so you need to be cash flow positive for those loans

@Leland Bishop

Use the hard money directory on BiggerPockets and talk to a few groups. Better to have a lender pre qualify you then trying to form a new relationship when you are under contract.

@Ja'Mere L French getting in touch with a lender prior to researching properties is a great way to start.  The right ones would be happy to explain what they look for in a borrower, experienced or not.  It will also help you identify a property that would fit into a particular loan program 

@Andrew B. There are lenders outside of the Fannie/Freddie/Non-QM world that specialize in loans without having to look at your DTI. Qualification is based on the debt service coverage ratio for the subject property, your credit and your liquidity. Happy to discuss further.

@Briana Gilbert BP is a great resource, you can find lenders that are local to your area or a national lender that can lend in many states.  Getting a referral from someone who has a completed a transaction similar to yours is also a great way to start 

@Jessica Sultani Not sure if you are using financing but many hard money lenders will require the borrower to be an entity such as an LLC so there is no question it is a business purpose loan.

Nice work sticking with it. We have refinanced hundreds of BRRRR properties in the past 24 months. Appraisers are slammed and not always producing the most accurate reports, so you need to be willing to pivot if you get a bad one. It is always best practice for the lender to notify the appraiser of recent rehab by providing a narrative and detailed budget. This ensures that they "remember" to compare your property to others nearby that appear to be in above average condition.