All Forum Posts by: Carrie Matuga

@Nick D.I'd start with identifying what your buy box is for your next property and what you are going to need for a purchase. For a cash out refi, you are generally limited to 75% LTV and rates right now are in the mid 7s for good credit and a DSCR over 1.0. If it were me, I would like consider refinancing only 1 of the 2 properties now and considering the second later in 2025 or even early 2026 when rates potentially soften. If you want to run few scenarios reach out.

@Timothy Frazier Yes, the only reason to use HML as a down payment is if the property is "mostly turnkey" AND you don't have the funds to renovate AND you have strong CMA comps from a real estate agent that supports that the fact that you are buying a property that is under valued AND your renovations would push that so that you could refinance. HOWEVER, this is a VERY expensive way to acquire property and can backfire if the new appraisal doesn't come in where you need. Remember HML have a countdown clock and are only good for usually 12 months. DM if is you want to talk other options.

@Joseph Fenner I love your goal and how high you've set the bar. I think to accomplish this you are probably going to need to employ a couple of strategies. I'd suggest you look at BRRRR to force value and minimize downpayment. Depending on the state you are investing in and the LTC to ARV ratio (you should ideally have this be less than 70% for cushion), you can finance up to 100% of purchase and renovation (that does not mean no closing costs but it can mean no downpayment). You can also look at creative financing/subto or owner finance as an option and finally there are DSCR options that will allow you to go up to 85% of purchase (but there is a fairly severe interest rate penalty), so I'd recommend staying in the 70-80% range. With a combination of all 3, you could hit your goal and then use your cashflow to start to help you in subsequent years.

@Jason Smith you may want to consider moving a few of those loans with comparable current interest rates over into an LLC and refinancing them into a DSCR product. I believe you are limited to 10 loans for you and 10 for your wife, but even though they are rented and bringing in income they go against your DTI.

@Johnny McKeon I think I would need to know more about your deal specifics - If I were working with you, I'd want to know what is your credit? how much experience do you have? What is the DSCR on this quad? Can you afford to move to 75% LTV instead? The rate is impacted ultimately by all of these factors.

You have to go with what your gut says about when you think you would refinance and where you think rates will be in 1-3 years. If you think it's going to drop if the fed cuts 5-7 times in the next year, it might make sense to look at an ARM with a 3 year declining PPP instead. How long of a PPP is the current rate of 7.75%?

Happy to talk more. Reach out.

@Ian Bower for a 120K loan, it's in the range of normal. I would say that the UW fee seems low, but processing fee seems high, but they seem to balance each other out and the admin fee is kind of a junk fee. It's hard when lower balance loans like this because the flat fees like processing and underwriting seem high as a percentage of the loan, but the reality is that it's the same amount of effort (generally) to process/UW a larger loan and a smaller balance loan.

@Glory H. The best advice I can give is to talk to a couple of different lenders and or brokers. Rates, fees, PPP options vary. It can matter. For a DSCR loan make sure that you specify clearly that you are not looking to see quotes with any point buy down. And when you get the quote back, scrub it. I can't tell you how often I see investors swear that they are getting the best rate on the planet, leaving me scratching my head... until I look at the details with them and show them where they are paying for points and how long it's going to take to break even on that. ASK anyone you are talking to for quotes with no PPP, 3 year PPP and 5 year PPP. Not everyone will do no PPP, but it's good to see how the rates vary. For each of those PPP you want to see what it looks like at 70/75/80 LTV. If you want a second look at what you are receiving or to talk more, send me a DM. Would love to connect.

@Enrique Roth It will certainly appeal to more renters, but hard do know what that translates to in higher monthly rent. I think it can depend on the value your market places on an extra half bath vs. cost to install. For example in one of my properties I chose not to add the half-bath, but when I saw the appraisal report, I saw that the appraiser had a value of $9000 for the half bath and it would only have costed $4000 to add it. When I did my next property, we made sure to refinish the basement AND the half bath because of what I saw on the appraisal report. I balanced cost vs. forced appreciation which ended up making that property a better BRRRR with most of my cash coming out during the refi.

@Zachary Wurtz With a HML, leverage will be determined by a combination of your experience and the deal details. Often, you can go up to 90% of purchase + 100% as long as that number does not exceed 75%-70% of ARV (depending on experience). There are also options if you invest in certain states to do 100% of purchase + 100% of rehab. You should really only pay on what you draw down on, so if you don't use the funds they are credited back during the refinance or sale. Happy to discuss more - send me a DM>

@Sonia Jones is the pricepoint of the loan above a 1.1M loan and is the building fully occupied or at least 80%? If so there are a few options for 80% financing you can use, if not, then 75% would be the cap. There's a weird window in financing above 4 units and below a 1M loan where rates are higher and leverage is lower than if you are at 1-4 units OR 5+ AND above 1M loan value. I'd love to connect and talk more. Send me a DM.