All Forum Posts by: Brenna Carles

@Will Tse Non-QM won't lock many times due to their investors not allowing them to until the file goes through due diligence or quality control audit. However, there are some lenders that will allow you to lock a Non-QM loan. If you are self-employed and need a Non-QM loan due to that, there are options where you can do a bank statement loan and lock as well, but I'm not sure of your current situation. 

@Janelle K. Eagle some are still offering 15% down but most are getting rid of it. It is usually 20% down minimum. The rates continue to rise as the Fed increases the cost for rates. Currently, base pricing for a DSCR loan with great credit is 6.125% with 2 points. Some DSCR lenders do not allow you to lock in until they are about 5 days out from closing but some will allow to lock for 30 days. Hope this helps!

Is there any way you could do a normal investment property loan? You could do just 15% down or the 30 if you preferred and you don’t have to own your primary residence for that. 

Also, Pigeon Forge and Gatlinburg is where I live. Many lenders lend here and you want to go with a company that specializes in the area. Pigeon Forge and Gatlinburg are not known as rural. Just a heads up! :) 

DSCR is going to be around 5.775 to 6.5% right now depending on structure of the loan. This is not going off of your personal income or debt but just the property's proposed rental income and monthly PITIA to get your DSCR. These loans therefore are more of a risk to lenders because you aren't showing any personal income or debt. Hope this helps!

Investment Info:

Single-family residence commercial investment investment.

Purchase price: $699,900
Cash invested: $150,000

Beach house in Cape San Blas that I did a little bit of renovations on. Second row on the beach! 3 bed 2 bath and CANNOT beat that price!

What made you interested in investing in this type of deal?

I believe the area will explode and be up there with tourest numbers comparative to Destin and PCB.

How did you find this deal and how did you negotiate it?

It was an off market listing and a Realtor I know down there sent me the address. Borrowers were asking 100k over what they purchased it for but this property is well worth more with the little bit of TLC we put into it!

How did you finance this deal?

DSCR loan.

How did you add value to the deal?

I am a broker so I think I am a lender's dream client HA! I had the folder of all docs needed at the moment of signing the contract and sending earnest money.

What was the outcome?

Awesome property that I will keep for a very long time and will eventually become not only a STR investment but a huge equity investment as well.

Lessons learned? Challenges?

Hmm that renovating a property isn't nearly as stressful as one might think if you are not the one doing the renovations? We did repaint the cabinets but we got a contractor to fix the bigger issues such as redoing the deck, repainting the home, etc.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Yes! Richard Newport was my Realtor and lives in the area so he is very knowledgable. He went above and beyond to help me with pictures and such of the property as I purchased sight unseen.

Agree with Dave on this one! However, you personally need to see if keeping the property is worth the hassle aka the money you will gain each year from it. If not, you could sell and do a 1031 exchange. Make sure you set it up with a 1031 intermediary like Dave. Lastly, if you do not sell, you may want to look at a HELOC as opposed to refinancing because a cash out refi is one and done with closing costs. A HELOC is a revolving line like a credit card and usually do not have closing costs. Hope this helps!

Hey Carolyn! 

1. If your SCorp has been paying for your car 12 months in a row on time, you may ask your lender if they are able to exclude that from your monthly debt since someone or some other entity has been paying for it. Some lender require that entity to be on the loan, but some do not. Doesn't hurt to check!

2. Do you own this property in your personal name? If so, yes, the monthly HOA payment would count against your monthly debt. So would the monthly mortgage payment, and monthly tax/insurance payment if they are not escrowed in the mortgage payment.

3. If you are owing to the IRS, you will need to disclose this. It shouldn't be counted as a debt, but will see if you have enough funds to pay that off within 3-6 months and will probably subtract out that amount from your available assets. Ask if they are able to do that, or if you do not have enough funds, you may see if they will treat it as a debt. 

Hope this helps!

What are the offers Nicole? If really low interest rate, I would just ask for a loan estimate to see if they are charging you points for that rate. It would be in section A and either be listed as buydown points, discount points, loan origination points or fees, or something within those lines. I would also ask what their timeline is on closing the loan and if their average is 30 days. Hope this helps!

You can do 15-20% down on this type of property to get a better cash on cash return. However, with less down means higher interest rates so it depends on if you would rather do a bit higher of an interest rate or put more down. A good rule of thumb is to compare the extra 5-10% down you are doing and the monthly payment with the higher interest rate. If that payment is 200 more than the other option for example, you would take the 5-10% down payment amount and divide by 300 to see how long it would take to regain that amount. For example the extra 5% if you are putting down just 20% would have been 13,250. Let's say your payment increases by 200. 13,250/200 = 66.25 months which in my opinion would be well worth putting less down because you wouldn't see that amount out of pocket until 5 and a half years down the road through interest. Hope this makes sense and helps!