All Forum Posts by: Kevin Hill

@Krystyna Fennelly

The bank will likely require the loan to be with an individual vs LLC. You have access to non bank 30yr fixed options held in the LLC at 5-6% if your bank does not work out.

@Amy Fulbright

There are commercial lending options available to you that are based on DSCR and don't have limits on # of loans you have in place (borrower would be your entity). Rates range from 5-6.5% typically. These are available on purchase or refinance and as individual

Property loans or portfolios.

@Melissa Owen

You should be able to find a lender with no experience if you have liquidity and no

Issues with background/credit. Expect to put 20-25% down payment. Is your exit sale or rental?

@Shane V Charles

There are non bank lenders that offer loans that are 30yr fixed/am with 30 yr term. These typically require DSCR above 1.0 or 1.2 to receive max leverage (75-80% LTV), and rates range from 4% to 6.5% depending on LTV chosen, FICO, and PPP chosen, and rate buy down. The only borrower qualifications to get these types of loans done are FICO above 575 and standard background check to verify the borrower(s) don't have current late pays, liens, foreclosures, etc.

You can search the bigger pockets network or marketplace to track down a lender that does this.

@Alexis Monroe

That is most definitely a scammer. You should never need to pay a lender upfront on a residential bridge loan for anything other than the cost of the appraisal.

@DMikal Mitchell If you treat it as your primary residence then you can likely get conventional financing as your primary residence, but I am not sure the compliance around that method as I am not an expert on conventional lending. We do a lot of rental loans on investment properties and have not heard of anyone getting 95% LTV conventional on them.

If you can buy the BRRRR property at a discount add value with the renovation and refinance at 75-80% LTVARV you may have little to no cash left in the property which of course provides a stellar cash on cash return and you can recycle your $ to do many of these.

+step: If you are planning on financing the purchase+reno, you should get pre approved with a HML in advance of going under contract. This will make sure a lender is ready to close within the timeframe needed. If you are buying+reno in cash, then you should be talking to lender about rental loans and steps for cash out refinance...

@Tramayne Simmons

You will need 20% down and could get 30yr fixed as portfolio or separate loan per property. If you are short down payment $ then bring in a partner. If you plan to sell any off don’t do as portfolio. Happy to connect.

@Simon Ruiz

Many BRRRR investors use private/hard money to acquire and renovate properties before refinancing into a 30yr rental loan. Their are advantages to financing instead of buying and renovating with all cash.

Advantages to financing:

1) allows investor to have multiple BRRRR projects going at once with the same amount of cash out the door.

2) a rate/term refinance into long term is much easier to close, typically allows for higher LTV and lower rate then cash out refinances. Why??? Lenders providing long term financing are at the mercy of the capital markets...who see cash out as a increase of risk thus reduce leverage and increase yield requirements.

Cash out refinances typically require seasoning period and may require very detailed proof of the cash you spent rehabbing the property. Taking longer to get you cash out of the deal and likely forcing more cash to be locked into the property.

3) a savvy investor can pull out most or all of their down payment during the rehab stage and line themselves for rate term refinance at which typically has a rate .5% lower than cash out rate. You will need to work with the right bridge and long term financing partner to get this done.

Advantages to cash:

1) you don't need appraisal to purchase as you would with most lenders. (The Con to this is you don't have 3rd party value opinion to double check your estimated as-is and ARV value).

2) you can closes without financing contingency which sellers prefer. (Good private/hard money lender can close in 5-10 days if you are pre approved which is as fast as most title companies can be ready to close).

3). No financing cost on the "BR" portion of BRRRR.

PS - I may be biased as I use financing for my BRRRR projects and act as a lender myself. Looking forward to other commentary on this.

Nick,

I have several Indy based turnkey operators and wholesalers that we can connect you with. Feel free to get in touch with me if interested.