All Forum Posts by: Brandon Beardt

Would love if I could find someone willing to lend on $60k-$80k fixers and dscr out with an ARV of $90-120k. Can find these all day but most lenders have a $100k minimum.

Haven’t had luck looking to local banks/credit unions because I know I’ll get that response.

We've done DSCR deals sub $100K as long as the appraised value comes in at $75K or higher. The FNF deals are tough if the loan amount itself is sub $100K. Not much appetite in the market for those types of deals from what I've seen.

1 Vote

Quote from @Michell Chase:

I am currently working on building my RE portfolio. As a beginner, before learning about all different types of lenders, I purchased my first investment property under a conventional investment mortgage in my own name. Since then I have opened my LLC and am beginning to buy other investment properties under that LLC. As I am not a spring chicken with my age..there are always concerns about "What happens if I die?"...therefore the underlying base of my question. Would it make sense to refinance my conventional into a DSCR with my LLC that way I can create a plan for my single member LLC upon my death so that my RE assets are also passed along...

Thanks

This may be a question you should ask an attorney. You can 100% refinance into a DSCR loan and close/vest in your LLC, however, I would imagine the rate is likely worse than what you have now with the conventional loan which would impact your monthly cashflow. You may also be able to simply QCD the property in your LLC but you run the risk of the current lender calling the note due because of the transfer. An attorney would be better off advising as to what would make the most sense for you in your particular situation.

0 Votes

Rehabbing & House Flipping

Post: Need help regarding a deal.

Brandon Beardt

Posted October 11, 2024 08:24

Lender
La Crescenta, CA
Posts 257
Votes 156

Quote from @Charwak Gummalla:

Hello BP family,

I need some advice regarding a deal I am looking at.

The property is listed below market and I want to buy it and rent it out. I also want to cash out refi.

Th hhouse is listed for 70k below market. We want to invest 20% and fix it a bit (the house is just 4 years old and just need some tlc. It's listed below coz the sellers are moving out of state and want to get rid of the house. Of course we will do all the inspections and due diligence)

Th goal is to fix it up a bit and cash out refinance it. The market value is about 450 and say we bought it for 370, can we cash out refi after fixing it? Will the appraisal be an issue coz we bought it for 370 3 months back?

Thank you for the advice

Yes, you can always cash out refinance the property after you finish the rehab/reno. If you're goal is to BRRRR the property, look for short term bridge/rehab loan options that will allow you to finance the acquisition AND rehab of the property. These are interest only loans with no prepayment penalties. Once you complete the rehab and have a tenant in place, you can refinance based on the NEW appraised value of the property once you've been on title for 90 days with a DSCR loan (if that's the type of financing you want to refi into). We do these daily and see these types of scenarios all the time.

0 Votes

Charlotte, North Carolina

Creative Real Estate Financing

Post: DCSR, LLC, and Trusts

Brandon Beardt

Posted September 20, 2024 10:22

Lender
La Crescenta, CA
Posts 257
Votes 156

Quote from @Melissa Odom:

Hello,

I am new to real estate investing. I currently have 3 LTR and soon will be remodeling a small family-owned shopping center in Wimberley, Texas. My question is how can I leverage my 3 rental properties to cash out money for the remodel? Doing a conventional loan for each property is out of the question due to my debt-to-income ratio. I have recently been learning more about DCSR loans. All three properties have positive cash flow - not a lot, but I am not losing money.

One lender I have spoken with stated that the DCSR loans are not regulated. In my situation I can only borrow 70% of LTV. He also stated a 3% origination cost. Is this for all DCSR loans or can these items vary?

I have also been told by multiple people that I should create an LLC or Trust. Maybe one LLC for all 3 properties or one LLC for each property? And then I think you can put an LLC into the Trust. I know with conventional loans the property cannot be in a trust or LLC when you go to refinance. That seems to be different with a DCSR loan?

Just reaching out for some feedback from people with more experience than I have in this area.

Thank you in advance for your time and information!

Melissa

DSCR loans are business purpose loans therefore there is much less documentation and red tape to deal with vs conventional financing. It also gives you the opportunity to be creative on how you want to vest/take Title (LLC vs Individual name). That being said, the trade off are higher fees and rates. The DSCR scenario you mentioned doesn't seem too far off depending on the full scenario. I would imagine you're capped at 70% LTV to make the DSCR work at whatever threshold that lender allows (typically 1.00x) or maybe it's a credit/FICO issue. 3% in origination also doesn't seem too far off depending on the loan amount. The lower the loan amount, the higher the origination percentage% is usually, however, as you asked - those items can vary greatly depending on the full scenario.

0 Votes

Austin, Texas

Mortgage Brokers & Lenders

Post: DSCR Loan under 100k

Brandon Beardt

Posted September 19, 2024 07:24

Lender
La Crescenta, CA
Posts 257
Votes 156

Quote from @Tim Flickinger:

Hey all. I have three investment properties Im looking to refi with a DSCR. Properties will probably appraise between 80-100k. Im running into many lenders not lending under 100k. Anyone have any products that wlll refi these smaller loans?

Yes, there are DSCR products available for properties under $100K, however, the minimum appraised value must come in at $75K (which doesn't seem an issue in your scenario).

0 Votes

Milwaukee, Wisconsin

Quote from @Su Pak:

Hi, I'm looking to refinance my Canton, OH (44714) BRRR property. Assumptions I provided to a mortgage broker is below. Below that was her response to a 30 yr fixed rate DSCR rates, plus origination and underwriting fees.

I would appreciate this community's thoughts on these rates, origination and underwriting fees. Thank you!

Assumptions:

Credit 720

Single Family Investment Property

Property Value: $120k

Amount financed: $90k or 75% LTV

NO Pre-Payment Penalty (not allowed in Ohio)

DSCR Ratio 1.25+

30 YR Fixed Rate DSCR:

8.250% with $2475 in discount points. P&I payment: $660
8.125% with $2148 in points. P&I payment: $668
8.25% with $1800 in points. P&I payment: $676
8.375% with $1462 in points. P&I payment: $684
8.875% with $0 points. P&I payment: $716

Origination Fee: $4500

Underwriting fee: $1395

Hi Su,

Yes, with the DSCR programs readily available today, I would say all of these are high. The origination fee of 5% is high. The interest rate for a DSCR loan above 8% is high. The minimum DSCR ratio of 1.25x is HIGH. I'm not sure why your mortgage broker mentioned there not being a prepayment penalty allowed in Ohio when I've closed a multitude of DSCR loans in OH that have prepayment penalties. It's very possible your broker is limited in the products they have available for you. Given all of these assumptions, you should be able to get a DSCR loan in the 6's/low 7's (rate), with a 3-5 year prepayment penalty, and minimum DSCR ratio of 1.00x, especially in OH. I would strongly encourage you to shop around for other options for this particular scenario.

2 Votes

Canton, Ohio

Quote from @John Asher:

I am applying for a DSCR loan and am now a renter myself. I'm being asked to provide 12 months of cancelled checks in addition to a lease to prove that I'm renting. Providing a copy of the lease makes sense but having to get together 12 cancelled checks doesn't to me. Is that typical now?

I would imagine it's to prove you haven't made any late payments for your current residence in the last 12 months. If you own your primary residence and have a mortgage that reports to credit, lenders can easily tell whether or not you have any late payments because it would show on the credit report. Big no-no if this pops up because why would a bank give you loan for an investment property when you're making late payments on your primary residence. Since you're renting, there is no way of knowing if you are current on your rent payments unless you show you've made the last 12 payments on time. Different requirements depending on the DSCR lender being used.

0 Votes

Quote from @Rob Austin:

In my market there are a lot of homes that are between $30k and $75k that could easily be turned into short-term rental investments.

I'm wondering if there are any non-conventional lenders who loan for this price range.

It would have to be dscr or something similar rather than conventional.

$75K is the lowest allowable property/appraised value I've seen for DSCR. Not sure of anyone else that will lend on a property that has a lower value than $75K.

2 Votes

Evansville, Indiana

Quote from @Jose Morales:

I bought a 110k property in cash last March. It currently rents out to tenants.

What’s the earliest I take out the equity and invest again?

Immediately if you want leverage to be based off purchase price + verified rehab. 3 months if you want leverage to be based off new appraised value.

0 Votes

Classifieds

Post: Shorter Seasoning Period?

Brandon Beardt

Posted April 29, 2024 14:55

Lender
La Crescenta, CA
Posts 257
Votes 156

Hi Robin,

The shortest Title seasoning period I've seen is 90 days if you're looking to refinance based on the property's NEW appraised value. You can time it right and start the process before the 90 day period, however, you'll have to close on or after the 90th day to meet guidelines. Best of luck.

0 Votes

Chattanooga, Tennessee

All Forum Posts by: Brandon Beardt

Brandon Beardt has started 1 posts and replied 246 times.

Post: Fix and Rent and DSCR loans Sub $100k Properties

Post: Can I refinance my personal conventional mortgage into a DSCR owned by my LLC?

Post: Need help regarding a deal.

Post: DCSR, LLC, and Trusts

Post: DSCR Loan under 100k

Post: What do you think about these DSCR rates and fees?

Post: Being asked to provide proof of rental payments for DSCR loan

Post: Loans for properties between $30,000 and $75,000

Post: What type of cash-out refinance loans are available for fully paid homes?

Post: Shorter Seasoning Period?

Brandon Beardt has started 1 posts and replied 246 times.

Biggerpockets Logo Post: Fix and Rent and DSCR loans Sub $100k Properties

Biggerpockets Logo Post: Can I refinance my personal conventional mortgage into a DSCR owned by my LLC?

Biggerpockets Logo Post: Need help regarding a deal.

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Biggerpockets Logo Post: DSCR Loan under 100k

Biggerpockets Logo Post: What do you think about these DSCR rates and fees?

Biggerpockets Logo Post: Being asked to provide proof of rental payments for DSCR loan

Biggerpockets Logo Post: Loans for properties between $30,000 and $75,000

Biggerpockets Logo Post: What type of cash-out refinance loans are available for fully paid homes?

Biggerpockets Logo Post: Shorter Seasoning Period?

Post: Fix and Rent and DSCR loans Sub $100k Properties

Post: Can I refinance my personal conventional mortgage into a DSCR owned by my LLC?

Post: Need help regarding a deal.

Post: DCSR, LLC, and Trusts

Post: DSCR Loan under 100k

Post: What do you think about these DSCR rates and fees?

Post: Being asked to provide proof of rental payments for DSCR loan

Post: Loans for properties between $30,000 and $75,000

Post: What type of cash-out refinance loans are available for fully paid homes?

Post: Shorter Seasoning Period?