All Forum Posts by: Deborah Wodell

Hey everyone,

I’m curious to hear how you decide whether to move forward with a fix-and-flip or hold onto a property for long-term rental income. Sometimes, a deal looks great on paper for a flip, but as you dig deeper, you realize the numbers might not line up as expected. What’s your process for determining if a property should be flipped or turned into a rental instead?

Do you ever change your mind mid-project? How do you pivot if you’ve already started a flip but realize a rental would be more profitable in the long run? I’d love to hear your strategies and any examples of when you’ve successfully adjusted course!

Since the seller needs to sell quickly, one option might be to look into lenders who specialize in mixed-use or multi-property loans. While blanket loans often cap at 4 units, there are some lenders who may be willing to consider both properties together if they understand the full picture of your deal.

Regarding your idea of separating the single-family sale from the multi-unit purchase, it’s not unreasonable to ask for the purchase price adjustment, especially since the single-family home is already discounted in the package. You could potentially negotiate this by structuring it in a way that aligns with the seller's need for a quick settlement, without lowering the cash they’d receive.

That's great you're starting together! Setting up an LLC is a smart move. When it comes to securing a loan, lenders will look at your personal credit, experience, and the financials of the LLC. While there are plenty of lenders willing to work with new investors, remember that the deal must make sense. It should have a good spread to ensure you're not losing money in the long run. Make sure your LLC is set up properly, and consider hard money lenders for more flexible options.

Great breakdown! You're spot on with how private money lending offers speed and flexibility compared to traditional banks. While traditional banks provide lower interest rates, they come with strict approval processes and long wait times. In contrast, private lenders focus more on the value of the asset, offering faster, more flexible loans for projects like fix-and-flips or rentals, which can be crucial in time-sensitive deals.

It really boils down to your priorities and preferences. If you’re looking for speed, flexibility, and a customized solution for your investment, private money lending is a great choice, even if the interest rate is higher. For some investors, the trade-off is well worth it. Banks might offer better rates but at the cost of time and inflexibility.

Your lender is correct—FHA loans can't be used under an LLC since they're for individuals purchasing primary residences. If you use an FHA loan as an individual, you'll benefit from a low down payment (3.5%) and more lenient qualification requirements, but you won't have liability protection, and the loan will stay in your name when it becomes a rental.

Using a conventional loan through an LLC offers liability protection and scalability for future investments but requires a larger down payment (15-25%) and often comes with higher interest rates.

If maximizing cash-on-cash return is your goal, FHA might be the better starting point. However, for long-term growth and asset protection, an LLC could be worth considering. It's best to consult a CPA for advice on liability and tax implications.

Refinancing with a focus on DSCR is a smart move when the timing and circumstances align. The key is to assess your current financial position and goals. If your DSCR has improved or market rates have dropped, refinancing might secure you better terms and improve cash flow. It's also a great strategy for consolidating debt or accessing additional capital for growth.

However, be mindful of potential prepayment penalties and how they weigh against long-term savings. Analyzing the impact on your overall financial health is critical. If you’re considering this step, consulting with a financial expert to evaluate options tailored to your situation can be invaluable

Thanks for sharing your experience—it’s unfortunate and frustrating to hear how things unfolded. Situations like this highlight how important it is to work with reputable lenders and do thorough due diligence. I hope things have stabilized since then.

I've noticed an increasing trend among investors looking for 100% financing or securing 90% financing and then seeking gap funding for down payments and closing costs. This approach can work for those with strong deal potential but raises questions about leverage, risk management, and lender flexibility.

What are your experiences with 100% financing or gap funding strategies? Have you found lenders willing to provide this, or are you using alternative sources to bridge the funding gap? Would like to know more insights on how this trend is shaping your deals and what’s been effective!

Hey! I'm looking for direct lenders or private lenders (not brokers) who can provide gap funding with creative financing options. Specifically, I'm seeking someone who can help cover down payments, closing costs, and 2nd position liens. Ideally, you can fund up to 65% LTV and are open to flexible structures like seller carrybacks or joint venture deals. I'm trying to add to my network estate where traditional financing doesn't always fit. If you or someone you know can work with these terms, let's connect!

Quote from @Jay Hinrichs:

junk fee's that show up on the hud at closing

lenders all offer the same points pretty much but dont disclose junk fee till the settlement statement comes out .. and points is just a bait and switch.

One lender hit one of my clients that I was doing a JV with... for 800 dollar property tax monitoring fee.. really on a 12 month loan..

but what happens is borrowers just focus on the points with no clue to the junk fee's  or using brokers who add fee's and points on top of the actual lenders fee's again bait and switch.

I hear you on that—junk fees can be such a frustrating surprise, especially when they show up last minute on the HUD. I try to stay clear from these types of lenders. And I agree that many borrowers focus too much on the points and overlook hidden fees.