All Forum Posts by: Caitlin Davis

@Jonathan Klemm I originate private loans, so I also handle the financing aspect. I'm not the underwriter who approves the loan, I just know what they need which is usually a thorough overview and proof of recently completed projects, where you were the GC. 

It's all about how we structure and present the experience you do have. I'm great at putting experience packages together for underwriting, and I know exactly what they look for when there's no direct construction experience verifiable by title. I also used to work at I Fund Cities! They're cool, but let me know if you have a hard time reaching them or want another option to consider. 

Many national private and hard money lenders do not lock rates until the appraisal is completed and approved because the numbers that come back on the appraisal really impact the pricing, if the market rent/values are off. If the "inspection" you’re referring to is the appraisal and there were issues causing delays in its approval, that could explain why your rate increased since they've been a little volatile lately. However, this wouldn’t typically happen directly because of the appraisal issues themselves, unless factors like low market rents or a lower-than-expected appraised value shifted your loan into a different pricing tier.

You will want to structure the LLC operating agreement where the lowest credit scores own the least in the LLC. If it were 3 investors for example, and 2 have low credit scores, you'd want to have them at 10%, 10%, and you at 80% so your higher scores can be used.

I can do a cash-out refinance at 3 months seasoning. Let me know if I can help you with that. 

Most lenders require 6 months seasoning to use the new, higher appraised value. I can get this done at 3 months. Message me if you'd like more information. 

Yes, I am licensed in New Jersey as well.  

 I'll shoot you over a connection request now! 

Yes, it's possible to get a DSCR loan on your rental property to pay off the outstanding HELOC balance ($285K) and the remaining $390K mortgage. Based on an estimated appraisal of $1.1 - $1.2 million, you could secure a loan of up to $900K (75% LTV). This would cover the $675K needed to pay off the existing HELOC and mortgage, leaving you with about $200K after payoffs and closing costs.

However, it's important to consider the cash flow impact. To qualify for a $900K DSCR loan, you would typically need to show rental income of around $8K per month, assuming property taxes are about $10K annually and insurance is around $3K. Given that your rental property currently cash flows over $3K/month, the DSCR might be too low to qualify for the full $900K loan, unless you can show additional rental income or strong reserves.

If your goal is to access that $200K for another investment, refinancing with a DSCR loan could be worth losing the low 2.99% rate, especially since it would eliminate the high-interest HELOC. However, you should weigh this against the potential for a higher DSCR loan rate, which might affect your overall cash flow. I'd be happy to help you run the numbers to see if it's the right move for you!

For a HELOC, the property must stay in your personal name, but it is possible to secure one on an investment property. While most banks don't offer this, I can arrange investment property HELOCs in PA, NY, OH, FL, and GA. With either option, there's no capital gains tax since it's a loan, not a sale. A DSCR loan allows for a cash-out refinance based on the property's cash flow, and a quitclaim deed at closing can transfer the property into an LLC, with only the transfer tax to consider. To determine the best option, we should run the numbers for both scenarios and see which is more profitable. Happy to assist with that!