All Forum Posts by: Andrew Postell

The Dallas Metro area is booming but it looks like Jacksonville, Florida is in a close 2nd.  What do you think? Where To Invest In Housing In 2017 according to Forbes

@Sandrine Rangeon this sounds like you own this property already?  Why aren't you thinking of just using a conventional cash out loan?  Hard money loans serve a great purpose and fill a BIG void for investors but for what you are describing it sounds like you should be able to do a conventional loan.  If I am misreading this then let me know and I can leave more accurate info.  Thanks!

@Samson Tefera your first flip or your 100th flip, hard money is a good tool to have at your disposal.  As you progress you may have lots of other options but there are a lot of "seasoned" people that use hard money.  It's another tool to have on your tool belt.  

@Brad Nichols help me with the understanding here.  The attached 2 story-townhome is one building in total?

@John Claborn it sounds like you are talking to portfolio lenders. Is there a reason for that? Conventional guidelines allow a 30 year fixed rate on an investment property. Conventional loans allow to refinance on the ARV on the property as well. Let me know if there's something else to consider and I can comment more. Thanks!

@Charles Trussell Personal Guarantee Loans, Home Equity Loans, Cash Out Refinance Loans, Credit Card Loans, loans from family members, etc.

@Anthony Wright these questions are so specific that I would highly suggest consulting a tax professional.  The up front expenses you incur prior to a property being "Placed in Service" are usually capitalized.  Big ticket items such as structural, roof, and HVAC repairs also fall into this category. In 2014 the IRS set out a large set of rules defining capitalization vs. deducting expenses and there are so to review it's a full time job.  Thus the reasoning for a CPA.  If you do have depreciation  it does help you a little when it comes time to qualifying for a conventional loan.   So based on your scenario you may choose one path over another.  Hope this helps some.

@Robert Hursey from the lending perspective if you need a loan to buy your next property you can get a loan in a business entity name with a "portfolio" loan.  A portfolio loan comes from an individual bank's own money.  So the bank can call the shots on how they want to structure the loan and who's allowed to be on title, etc.  Most portfolio loans will allow you to buy in the business entity name.  You may have to personally guarantee the mortgage payments but your purchase contract, deed, etc. can all be in the business name.  Portfolio loans do vary widely - from higher interest rates to shorter amortization schedules - so make sure you know all the details BEFORE putting in a contract on a home.  Interview different banks to find out each bank's tolerances and loan differences.  The conventional loan products are the ones that require an individual person to buy the home, be on the mortgage, deed, title, etc.  Most investors do use a conventional loan to buy the property and then switch the deed to the business entity name after closing.  In either case you would have to have to business setup before you start buying the property.  Hope this helps.  Thanks!

@Robert Howard there's some lending concepts here for you to be aware of that I think would help out your math. To refinance a conventional loan you are limited to 75% of the After Repair Value (ARV) on the home. Also, a cash out conventional loan limits your "Loan-to-Value" at 75%. I would suggest modifying your loan numbers in Year 2-30 and that will help the numbers be more acurate. I have a hunch that you are looking to get more equity out of the home. Then you would need to gain access to a portfolio loan. Portfolio loans are non-conventional loans that are governed by each individual bank differently. It is essentially the banks own money. They can go up to 80% LTV...but they might have other things that are very different. They may only be a 20 year mortgage, which would make your payment higher because you are paying it off quicker. They may be a higher interest rate, which again would make the monthly payment higher. They might be an adjustable rate mortgage, balloon payment, etc. Lines of credit on an investment property also have similar structures. Some banks do not go over 70% LTV on a LOC, some will have a significantly higher rate, etc. Conventional loans are what most investors want to receive first since they are the lowest rate, a fixed rate, and can be amortized over 30 years. If you have more questions on this feel free to Private Message me. Hope this helps!

@Barshay Graves I would recommend speaking with a permanent finance lender first.  Most of the hard money guys I work with require a prequalification letter from a permanent lender if the customer is looking to permanently keep the property.  You see everyone's hesitation on this post to what you are doing.  Using Hard Money is acceptable but make sure you have a way to get out of that loan before starting it.