All Forum Posts by: Brittany Minocchi

No way to say for sure since each lender is different and I have no idea of the terms you need or your FICO, but it is typically the prime rate plus a couple of points. Right now, that would put you around 8.5-9.5%. SUPER rough estimate. 

Hey Jonathan!

Welcome to BP. I have a few properties and am also a mortgage broker, happy to answer any questions about general investing or financing options. Feel free to connect!

Hey Jordan!

Yes, you'd be doing either delayed financing or a cash out refinance depending on the timing. The only instance where it might be more beneficial to do it this way vs. getting financing right off the bat is if you need to be SUPER competitive with your offers in your market. Otherwise like Nicholas said, you're paying some unnecessary costs and will likely need to keep more equity in the property with a refinance than what you would've buying it with financing right off the bat. 

Do you want to keep the in-laws' house? Would it make sense as an investment? Would you own it free and clear? If you move out of state, are they coming with you or would they maybe want to move back into their house? Can you buy a duplex in Arkansas and live in one side just to get your feet wet and make sure you like the area? You could either sell or rent the in-laws' home for a year, move to Arkansas, live in the duplex for a year and move back if you decide you don't like it. Will you be keeping or selling your current primary? Could you do a cash out refinance of that property and rent it as well, or are you planning on selling? 

Not true. 

There are options for both HELOCs and HELOANs on investment properties. Many (not all) lenders require that for a HELOC, the property is titled to an individual, not an entity (like an LLC) and qualifying for them is typically full doc, meaning income, employment history, tax returns, DTI will be required.

HELOANs can be done without any of those things and can close in an LLC. These are closed-end seconds with a fixed rate, and they do carry prepayment penalties.

Both options typically cap LTV at 70% and will have higher rates compared to a cash out refinance - plan on double digits.

Hey Martti!

I talk to a LOT of out of state investors looking near my hometown in the Akron/Canton area, as well as places like Cleveland, Toledo, Dayton, Columbus and Cincinnati. If this is your first out of state deal, make sure to have a solid team in place. Finding a reliable contractor for the rehab portion and then a good property manager once it's rented seem to be the biggest issues for those who aren't local. 

From the financing side of things - keep in mind that conventional cash out refinances require 12 months of seasoning in order to use the new appraised value. You can bypass the longer seasoning requirement with a debt service loan. OH is one of the states where lenders sometimes require that you buy out the prepayment penalty, which in turn will increase your rate and make it more difficult to cash flow. Contrary to what some say, this is NOT a state-wide requirement, it is lender dependent. Your LTV will also affect your rate. Debt service loans typically max out at 75% LTV for cash out refinances, but some lenders allow 80%. You will see a higher rate with that increased leverage. Just a few things worth considering.

If you have any questions, feel free to connect!

Welcome Ezra!

Small multifamily is how I got started as well, specifically duplexes. If you have any financing questions, feel free to reach out. Good luck! 

Hey Anthony, 

Welcome! BRRRR is a great strategy. Are you looking at single family properties or multi to start? Will you be funding your own rehab or would you need to roll those funds into your initial loan? Be sure to pay attention to anticipated ARV and max LTV on the refinance, as well as seasoning requirements - this is where I usually see people run into problems. Happy to chat if you'd like to connect!

I'm a bit farther north, but I've helped a couple of people with loans in that area - the properties seem to be working out well for them! 

They're available, but rates will be quite a bit higher than a refi and LTV is typically limited to 70%. Expect double digit rates. You could also explore a second lien - rates are still on the higher side, fixed rate instead of variable and it's a lump-sum loan, not a line of credit. Easier to get done than a HELOC on an investment if you definitely don't want to do a cash out refi and/or it's titled to an LLC. Most HELOCs only allow individuals to hold title.