All Forum Posts by: Brandon Beardt

Quote from @Patrick Williams:

I have a two unit investment property that I paid too much for in 2015. Small unit is an Airbnb, large unit is rented full time(pre-pandemic both units were Airbnb but renters are decent now and are low maintenance). Currently, the property pays for itself but there isn't much cashflow (maybe $50-100 extra on a busy Airbnb month). Starting next month, the full time rent is increasing by $150 so then it will be $200-250 per month cashflow. There is about $150K in equity in the property. Interest rate is 4.75% (I know, right?). 

Should I tap into the equity to buy another property even if the cashflow on this one is not that great? 

 Hi Patrick, only you'll be able to answer that question. You're going to have to run the numbers to see what your new cashflow will be if you were to refinance the property, if there is any at all at that point. Then, take that into consideration when using the equity to purchase another property. What sort of return or new cashflow are you expecting/hoping to get from this new property? If the numbers make sense and are in line with your risk tolerance/RE investing goals, then go for it! 

Quote from @Rick Dreyer:

For those of you following the BRRR method, or buy borrow die, etc, could you share how you have been able to get multiple refinances, or mortgages on your properties?

We would like to hold onto as many properties as possible, and just refinance them to pull out our equity as possible. However, we're worried that lenders will look at our portfolio and see all of the debt we have, without seeing the income

For our market, the rents really only cover the mortgage, but appreciation is one of the highest in the country

 Hi Rick,

Many investors utilizing the BRRRR strategy are opting for alternative financing solutions, instead of conventional financing, in order to recapture their capital quickly to keep the process ongoing. You can easily buy a property, do the rehab, and cash out refinance after only 90 days of being on Title with DSCR financing. These lenders wont look at your entire portfolio nor base the qualification off of whether or not these other properties you own are producing any income (unless it's the subject property). With conventional financing, you'll now have to wait 12 months before being able to get the cash out of the property which can drastically increase holding costs (assuming you purchased with hard/private money). In addition, you may have a much tougher time qualifying if your DTI is out of line with your other properties in consideration. It also sounds as if you're trying to refinance the property every year or so to pull out the newly acquired equity through the appreciation, did I understand that correctly? With that in consideration, not sure if you'll have a liking to the prepayment penalties associated with this type of financing, but nonetheless, it's another tool in your arsenal.

If your worry is that lenders will look at your portfolio and review all of the debt you owe, DSCR lenders don't take that into consideration. DTI is not a factor and they only look at the subject property and whether or not it cash flows.

If your worry is that the rent will only cover the mortgage payment, that is exactly what DSCR lenders want. In fact, most just want the projected PITI payment to be equal to the projected market rent for qualification, though, some allow negative cashflow at lower leverage (not ideal IMO). 

The good news is, you have options when it comes to the BRRRR strategy, but you'll have to choose one that best suites your needs and goals. Best of luck!

Quote from @Kevin Murphy:

I own a duplex in Portsmouth, VA. Both units are rented. I am open to DSCR, ARM or other terms that keep the APR low (relatively). I have owned it over a year and it's in my LLC. I would like to keep it that way and avoid a ding from a credit pull but I am flexible.

 Hi Kevin, are you able to provide some deal specific details? I'm sure most if not every lender on here can help you out in some way shape or form. In regards to a credit pull, that's almost guaranteed as lenders need your score since it will affect overall qualification and pricing for your specific scenario, but won't happen until you're in process. You should be able to at least get a quote without needing your credit pulled.

Quote from @John Roberts:

Quote from @Brandon Beardt:

Quote from @John Roberts:

Quote from @Brandon Beardt:

Quote from @John Roberts:

I recently spoke with Kiavi about getting a loan and they told me that they only loan to LLC's. Is this the case with all lenders? Any recommendations?

Thanks.

 Hi John,

No, not all private/commercial lenders require you to close in an entity. I know of a few lenders that will allow you to close in your individual name depending on what you're looking for. What type of loan are you trying to get?

 Hi Brandon,

thanks for the quick reply.  I am looking to get a loan for a purchase + rehab.  Probably somewhere in the neighborhood of $100-120k.

Understood, any reluctance in getting an LLC set up? Most are relatively easy to set up and maintain.

 No, not really.  I spoke with my CPA and she said that we need to do it sometime this year.  Just need to take the time to do it.

We have 4 properties now that we paid cash with, so I am looking at loans to continue to scale. Not sure which ones we will buy and hold (BRRR) and which ones we are going to flip. We just started Nov of 2022, so still kind of new to it all and learning as we grow.

John

That's great to hear you already have 4 properties acquired since starting last year! Have you considered tapping into any of the equity of the properties you've paid cash for to utilize for expansion? Also, since you mention the BRRRR strategy, keep Title Seasoning requirements in mind when on the Refinance part of the process. When BRRRRing, most lenders will want you to be on title for at least 6 months before being able to cash-out on the new appraised value post-renovation, however, I'm seeing programs that'll allow you to get cash out using the new appraised value as soon as 90 days of being on title. Just something to put on your radar as you're learning and growing your portfolio.

Quote from @John Roberts:

Quote from @Brandon Beardt:

Quote from @John Roberts:

I recently spoke with Kiavi about getting a loan and they told me that they only loan to LLC's. Is this the case with all lenders? Any recommendations?

Thanks.

 Hi John,

No, not all private/commercial lenders require you to close in an entity. I know of a few lenders that will allow you to close in your individual name depending on what you're looking for. What type of loan are you trying to get?

 Hi Brandon,

thanks for the quick reply.  I am looking to get a loan for a purchase + rehab.  Probably somewhere in the neighborhood of $100-120k.

Understood, any reluctance in getting an LLC set up? Most are relatively easy to set up and maintain.

Quote from @John Roberts:

I recently spoke with Kiavi about getting a loan and they told me that they only loan to LLC's. Is this the case with all lenders? Any recommendations?

Thanks.

 Hi John,

No, not all private/commercial lenders require you to close in an entity, though I'm sure most prefer it for business purpose transactions. I know of a few lenders that will allow you to close in your individual name depending on what you're looking for. What type of loan are you trying to get?

Hi Kenneth,

There are plenty of HML lenders that can help you in the Build Your Team tab above. Do some research, read reviews, and talk with lenders that are familiar with both the FNF and BRRRR strategy. If you're looking to BRRRR, make sure you're aware of the title seasoning requirements for the refinance part of the strategy. Most lenders are at 6 months of seasoning, however, I'm seeing programs that allow a full C/O refi using the new appraised value with title seasoning as early as 90 days. Hope this helps and best of luck!

Quote from @David Cunha:

Hello everyone I'm currently looking at properties to rent in Phoenix/Scottsdale area. Looking to use a DSCR loan and I'm curious of what rates are currently available?

 Hi David,

Like the others have said, I'm seeing DSCR rates start in the low 7's and go up depending on the lender's specific loan level pricing adjusters. Every lender will have different pricing adjusters depending on the category, such as a lower or higher FICO score/LTV, so it's always a good idea to shop around.

Quote from @Terry Mants:

I'm in St Pete Florida and am wondering if anyone can point me in the right direction or recommend where i can get the best DSCR loan

Hi Terry,
There are many DSCR lenders here on the forum that can help you out with an 80% DSCR loan. You can research some in the Build Your Team tab above, read their reviews by other investors here on Bigger Pockets, and reach out to get a better sense of what you'll be able to get. Talk to a bunch as everyone has different sets of guidelines and requirements. 

Quote from @Steven Lucarelli:

Hi all,

I’m looking for recommendations for lenders that offer fix n flip funding. Competitive rates and the ability to provide the funding quickly

are primarily what I’m looking for. Also transparency and no hidden fees.

Thank you

 Hi Steven,

You should be able to find some good ones in the Build Your Team tab above: https://www.biggerpockets.com/real-estate-companies/hard-money-lenders

You can research a few different lenders, see what they have to offer, and even read their reviews from other active investors here on Bigger Pockets. This should help you in your search for a top tier lender. Best of luck!