All Forum Posts by: Brian Fung

Aloha Lina, there's a few things going on here: 
1. 1 acre lot and septic systems indicates potential for rural property classification that can hurt your max LTV.
2. You're going to be adding value to the property. DSCR loans are typically stabilized properties so doing anything other than collecting rent is not attractive to lenders for DSCR loans. In this case, consider just asking for a max cash out DSCR loan. What you do with the cash out proceeds would be "invest into additional properties/have operating capital to take advantage of additional opportunities as you are always on the hunt for good deals as an investor". This is vague and gives you the ability to add your mobile home if you see fit while also jumping on other opportunities if they arise. It will also not raise any red flags to the underwriters that you might end up doing a bunch of work to the subject property which can be seen as added risk for them.

3. Even though you only need 15-30k, DSCR loans are typically at least 75k as the minimum requirement and you'll get an increase on your rate for having a "low loan amount." Consider what the max amount is that you could pull out and what you could reinvest that cash out into such that you can earn an arbitrage on the cost of capital and the cash flow/ROI you'd get for investing the additional liquidity.

4. As you scale up and lose the ability get traditional financing due to high DTI, DSCR is the easiest transition to the next step. You'll only be limited by you liquidity, credit score, and cash flow of each property.

Hope this helps! Aloha. 

Aloha Rolan, 

I agree with everyone who has posted so far. If you're taking that much risk you should be getting a lot more profit. Typically if one partner is going to be the "liquidity partner" then the person who has no liquidity or financial risk should do the bulk, if not EVERYTHING else if the expectation is to split profits as much as you are splitting them. Your partner either needs to take a on a lot more responsibility with regard to the execution to justify the profit split or he needs to take a much smaller split and just be hired out as a contractor to do the design work and you keep the profits. In addition, make sure your hard money lender is maxing out your leverage so you have the least amount of cash out of your pocket. If you're not having conversations with your hard money lenders like, 85-90%+ of the purchase price, 100% of your rehab costs and maybe even financing your mortgage payments, advanced draws on your construction budget, you might be risking more money out of pocket than you need to. Hope this helps. 

Aloha. 

@Stefano, there are a host of lenders that can lend to foreign nationals. Expect to pay a slightly higher rate and make a larger down payment than what you see on lender's websites with regard to their rates, points and LTVs. Some lenders have a greater appetite for foreign national loans than others. Working with a good loan officer or mortgage broker can help you to get your file set up in a way that presents you in the best light to underwriters. Hope this helps. good luck!