All Forum Posts by: Calvin Quallis

Quote from @Jonathan Taylor:

@Calvin Quallis there are a few options you can consider before jumping into a Hard Money loan. These loans are a good tool but they are the most expensive loans to get. DSCR (if lender can use appraised market rents and the new loan can debt cover on this amount) or negative DSCR loans are an option along with whats called a no ratio loan. These would still be in the higher rates but less than HMLs and have longer terms than 12 months to buy you some time to stabilize your asset. This is a great asset and the right financing can turn this into a cash cow.

 @Jonathan Taylor Thanks, so you're saying that there are lenders that should be able to use appraised market rents for the cash out refi into another DSCR vs. having to show rental history, which is impossible while the property is being renovated. Albeit, the new payment should be able to support the debt.

Quote from @Steven Foster Wilson:

Quote from @Calvin Quallis:

Hi,
Purchasing a buy and hold property in the Hamptons, NY for $1,895,000. Will put $500K in property. ARV is $3M conservatively, with a really great reno can fetch up to $3.5M. Purchase contract has no mortgage contingency and needs to close in 60 days, so decided to do a DSCR with no prepayment penalty to cash out after repairs. Was told I cannot do cash out DSCR refi because I will have no rental income yet and I've held the property for about 6 months while doing the reno.

Any suggestions on which loan I should look at for at least a 75% LTV cash out refi. BTW: I'm self employed.

Is there a reason you cant wait the 6 months until the property is stabilized? Most lenders will have a 1.2 DSCR

 @Steven Foster Wilson You have a good point there. Hadn't considered that. That may be the answer. Get rents coming in if I can't refi out after the renovation and refi after I have 6 months of rental history.

@Stephanie P. My concern is not being able to get out of a hard money loan with all the volatility and being stuck with a $20K a month payment and fees to extend. The IO 40 year with 10 year interest only and 30 year fixed is sounding better here. Thanks for your advice. 

Quote from @Stephanie P.:

Quote from @Calvin Quallis:

Hi,
Purchasing a buy and hold property in the Hamptons, NY for $1,895,000. Will put $500K in property. ARV is $3M conservatively, with a really great reno can fetch up to $3.5M. Purchase contract has no mortgage contingency and needs to close in 60 days, so decided to do a DSCR with no prepayment penalty to cash out after repairs. Was told I cannot do cash out DSCR refi because I will have no rental income yet and I've held the property for about 6 months while doing the reno.
Any suggestions on which loan I should look at for at least a 75% LTV cash out refi. BTW: I'm self employed.

This is a case for hard money with a 12 month term. That will give you time to renovate and then sell. DSCR shouldn't come into play. If you can get 8.5% with no prepay and no lender points, you should take it. That's close to hard money right now on the east coast.

@Stephanie P. Are you suggesting that we do a hard money loan or because the DSCR with no prepayment penalty and no points is at 8.5%, I should just do the DSCR?

Quote from @Raymond J. Rodrigues:

@Calvin Quallis, you can qualify based on proposed rents or current rents when using a DSCR loan. Some lenders want rents in place, others do not care. Whether there is a middleman or not on the lender you're working with, for no PPP, that rate still seems kind of high with no points. This is all of course dependent on what your credit score is.

 Thanks Raymond! My middle FICO score isn't great, but isn't horrible at 707.

Quote from @Rolly Weaver:

Have you looked into hard money on a shorter-term and refinance into longer-term loan once repairs and higher ARV is reached?

I have not. However, would there be a benefit to a hard money loan if the current DSCR I’m looking at is an 8.5% interest loan with no prepayment penalty and no lender points (no middle man here). The rate if I accepted a prepayment penalty would be 7.375%, but doesn’t make sense if I’d like to refi and cash out in 6 months.

Hi,
Purchasing a buy and hold property in the Hamptons, NY for $1,895,000. Will put $500K in property. ARV is $3M conservatively, with a really great reno can fetch up to $3.5M. Purchase contract has no mortgage contingency and needs to close in 60 days, so decided to do a DSCR with no prepayment penalty to cash out after repairs. Was told I cannot do cash out DSCR refi because I will have no rental income yet and I've held the property for about 6 months while doing the reno.

Any suggestions on which loan I should look at for at least a 75% LTV cash out refi. BTW: I'm self employed.

Hi,

I’m a self-employed business owner who is looking to purchase a 37 acre property in NJ. Looking for a bank statement program that will finance with decent rates to hold and short term rent property.  Property is a rural property with 3 cabins and a 3 bedroom home. 

My current broker who’s helped with financing other properties with bank statements only cannot find a lender that will do more than 15 acres. Note it’s 4 parcels of land. The cabins are on 10 acres. The main home is on 14 acres and the remaining 13 acres are spread across 2 parcels.

Any recommendations for brokers or creative ways to finance is much appreciated.