All Forum Posts by: Andrew Zamboroski

I am in the process of acquiring a short to mid term rental in the somewhat local vacation/ tourist destinations in my region. I want to utilize either a 2nd home type product or investment property product. I was reading about DSCR loans and they seem like a great tool for cash flowing properties.

My ultimate question is does anyone know if there is a property criteria for these products? Can it be a single condo or apartment.

Anything helps BP community, thanks !

Best,

Justin

Property type can sometimes matter. For example, condos may require more money down on a DSCR loan, especially if it non-warrantable. In general, a single family home can do up to 80% loan to value. The biggest reason to go DSCR versus second home would likely be qualifications. DSCR loans are usually much easier to qualify for since they're not based on your income.

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Quote from @Piper Pepperidge:

Most lenders impose a minimum 100-150k lending amount, even less will go below the minimum and lend on an LLC. And 60-90k is also typically too low for dscr loans. Wondering if anyone knows any good places?

Stacy did a phenomenal job breaking things down! We can do DSCR down to a 75k value / 50k loan size in most markets. Fees are higher on a proportional basis, but it does make sense in some markets (particularly the Midwest in my opinion). One tricky part that often happens in this price range is dealing with deferred maintenance. Often times the best “deals” require some work to get them rent ready.

I hope this helps!

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Quote from @Elias Hay:

looking to expand my rental portfolio by looking at properties in St. Louis and Indiana. most of the properties been viewed are between 70 and $100,000. Are there lender recommendations that do loans under 80,000? especially DSCR?

We can do DSCR down to 50k loan amount / 75k value. As many have said though, the fees are proportionally higher on a smaller loan (after all $1000 is 2% of a $50,000 loan). However, it’s certainly a viable option for the right situations and markets. In MO there is usually a pricing adjustment compared to IN markets.

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Quote from @Dulce Davis:

I hear that it's hard to find someone in Texas who will do blanket mortgages. Another lender who is also an investor, says its really not allowed in our area but she knows it happens. What are y'alls opinions on blanket mortgages?

I have 5 SFRs so far. Four mortgages have a balance around $90-100K, with values ranging $135-165. One property has no mortgage. I'm wondering if it would be an option in my situation to do a blanket loan for scaling. Or, just keep going as I am, doing delayed lending to cash out after I make repairs and get a tenant in them. Pros vs cons?

Portfolio or blanket mortgages are a great tool in the right setting. They can be convenient to do (one loan versus 5 in this example) and save on processing costs (versus an individual loan). However, you marry the properties together for better or worse. One particular pain point investors find is selling or refinancing one property out of the bundle. There is normally a partial release premium that requires you to pay additional proceeds towards the remaining properties in the loan. That can be particularly tricky in our current environment.

We assisted with many of these during low rate environments where the loan was planned as a very long term option. In todays market, they are most popular when purchasing a larger bundle, needing flexibility on a bundle (lower purchase prices being allowed for example), or when cross collateralizing equity as downpayment.

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Houston, Texas

Quote from @Rob Wallace:

I'm looking to purchase a rental property in Cincinnati. My partner and I are unmarried and have set up an LLC with each of us as 50% members. We would like to purchase the property through the LLC with financing directly to the LLC.

We spoke with a credit union who said that would be possible; however the loan was not approved due to both of us being NY residents. The LLC is an Ohio entity with an agent located in Ohio, and we also have local property management.

Is there any way we can amend our operating agreement/LLC structure in order to anonymize our addresses? Potentially a PO Box in OH for our addresses?

If anyone could recommend a lender who would be willing to loan directly to an LLC, that would be greatly appreciated!

A DSCR loan is a perfect fit, plenty of lenders like myself able to help.

For your anonymity, consider consulting with your attorney.

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Quote from @Sean Haran:

Hello, I’m looking at a deal that would be perfect for a hard money loan, and I’d rather use someone else’s money rather than my own to get this done. I made an offer which (according to my realtor) is about to be accepted today or tomorrow.

All of the hard money loan options I've found require me to borrow in an LLC, which I don't have now. Since I am literally about to start the process of buying this property I doubt I have enough time to set up an LLC for the loan. Is there any hard money lenders who lend to individuals rather than an LLC?

Depending on the specifics including the state, we have assisted individual in their name. As Chris mentioned, it may require additional documentation.

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Columbus, Ohio

Quote from @Elvis Tam:

I am starting to expand out of the northeast into other markets further away. I'd prefer to work with a national lender instead of having to start new relationship with local lenders. Anyone have any advice/recommendations for me?

To state the obvious I am looking for a lender who:
- offer loans in multiple markets across the country, or at least in the eastern side of the US
- has reasonable terms
- easy underwriting process

Please recommend based off personal experience. Thanks!

Chris named quite a few national lenders. We’re a correspondent and happy to help in most states. Each lender has their own nuances to help you grow, as not all projects are equal.

Cheers!

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Quote from @Yolanda Martinez:

Jay Hurst,

Yes I do but do all these options also go base on your DTI?

DSCR loans do not that others have mentioned 😊

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Quote from @Tomer Maoz:

Hello,

I want to use my equity in one of my SFRs to purchase a short-term rental (I currently have 8 LTR) . I have been searching for a bank that will do HELOC on a rental, and so far, the only one I have found that could work is Better.com. All the other banks I spoke to, like TD Bank, HSBC, and Signature FCU, have limitations, such as you can't have more than 4 mortgages in your name, or they can only use 3 properties to offset DTI.

Better.com offers a rate of 9.5-11% (depending on loan amount, credit score, etc.), and it also requires the property to be in my name (not in an LLC).

Does anyone know of a bank that will do HELOC on rentals in NC that do not require the property to be in the owner's name and/or is not limited by how many mortgages you already have on other rentals?

Are there other types of loans people use to pull equity from their rental to purchase additional properties?

I appreciate any input in advance.

Not only are helocs harder to find for investment properties, what you intend to do with the money matters. If the money will be tied into a project long term, a higher rate on your heloc can really impact your overall payment on the property (fixed debt plus heloc). Weigh the cost of your current payment plus a heloc payment versus a long term fixed rate on a DSCR loan or whatever route you plan to go.

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Quote from @Mike Griffin:

What are you seeing for Lender Fees now? I’m borrowing on a 2 family for a New Hampshire investment property. Being quoted $1500 which seems high. 7.45% rate with 1 point charged.

As others have said it does not seem too bad! On an initial loan estimate, fees can be inflated depending on what they encompass. The rate for one point sounds reasonable though.

1 Vote

All Forum Posts by: Andrew Zamboroski

Andrew Zamboroski has started 0 posts and replied 273 times.

Post: Best financing products for short to mid term rental

Post: Looking for low minimum amount loans for 60-90k properties

Post: sub 100k Investment mortgages

Post: Opinions on Blanket Mortgages

Post: Recommendation for mortgage lender who will lend directly to LLC

Post: Hard money loan for individuals? (not LLC)

Post: Looking for a good national lender/credit union for Mortgage

Post: How can I used my current rentals to invest in future ones?

Post: Should i pull equity from my rentals using HELOC

Post: Lender Fee - How Much?