All Forum Posts by: Dennis Muno

I would also recommend you consider your financing strategy and also how to analyze deals you make sure you don't bleed financially on your investment properties.

I would also recommend you use DSCRs loans especially given that you are new. DSCR loans unlike hard money, private money etc don't require a downpayment usually. The loan qualification is usually based on if your rental income will be enough to cover your monthly expenses- the loan principal and interest, taxes and insurance.

This lets you get started as an investor without a whole lot of money down. You will just need to pay the closing costs of the DSCR.

Well if you are talking about a residential property for your abode, not investment, there are lenders who will get you into a home for 3% down on a conventional loan. There is also the FHA loan which gets you into a home for 3.5% down.

If you are talking about investment, it is possible to get an investment property with no money down, just your closing costs, which would be a DSCR loan.

DSCR loans are based on the assumption that your rental property income will take care of the monthly payment after your costs. You only qualify based on your DSCR ratio.This is a good strategy to get started without a whole lot of money down as a new investor.

DSCR ratio= monthly rental income/ monthly PITI(principal interest taxes insurance). So if rent is $1500/mo and PITI total is $1000/mo, DSCR ratio= $1500/$1000=1.5. Most lenders will lender to you with a DSCR ratio of 1 and above.

I would recommend you consider a DSCR as a new investor. This lets you get started investing especially without personal income requirements if your personal income is not there yet to qualify for say a conventional loan on an investment property.

Yes, it can be done. 

DSCR loans are based on the amount of rent vs your expenses for the property. DSCR loans are qualified based on the the DSCR ratio= rent/total PITI(principal,interest,taxes, insurance).

So, if your monthly rent is $1200 and your monthly PITI is 1000, your DSCR ratio would be 1.2($1200 rent/$1000 PITI expenses). Lenders usually like to see a 1 and above DSCR ratio. The better your ratio, the better your interest rate and terms.

So do you have an idea of what the rent you will charge will be? Does the property already have a tenant in it? Even better for you. Lenders would like to see a rent schedule and past rents paid. 

I hope this is helpful

Have you ever considered a DSCR loan?

DSCRs are easy to do, and will be so much easier given you have the two units rented out currently.

DSCR loan do not look at personal income, they only look at how much income comes from your property vs your monthly property obligations,i.e, principal interest taxes, and insurance(PITI).

For example, if your rent total monthly is $1500 and your PITI is $1,000, then your DSCR ration will be $1500/$1000= DSCR ratio 1.5. Lenders love to lend on properties with a 1 or above DSCR ratio.

I would say you should look up a DSCR loan to help you proceed.

You can pm me for help

Contact a few lenders and compare pricing.

If you can't prove recent income, I believe a DSCR would be your best bet. You don't need stringent personal income. Just amount of money your property brings in monthly.

DSCRs require the monthly( or in the case of an AirBnB the average monthly) rent collected vs the PITI-principal, interest, taxes, insurance on the said property(ies). If average monthly rent is $1500 and PITI monthly total is $1000, your DSCR ratio is $1500/$1000=1.5. Lender like a DSCR ratio 1 and above.

I believe a DSCR loan would be the best way to proceed with the information you have given so far

Well the only way to know what is or would be better would be to run some number on both scenarios. You should talk to a lender/mortgage broker and find out the interest rates, loan terms, would the interest rate float, how much loan amount would you would get for a HELOC vs refi on your home vs an investment property. I believe if you do that you would get a better idea on how to proceed

 I would say for each loan and each lender, requirement would be different. So, there would be a hard and fast rule to qualify for either hard money or private money. 

I would recommend to increase your chances of getting some financing you work with a mortgage broker. Mortgage brokers usually have access to 50+ lenders, which allows them to shop with multiple hard money and private money lenders to find them the best deal possible. I would recommend you reach out to one to see what they can do for you

I think with this project you should decide what the need of the community close by will be. If your property can satisfy a need i.e(accomodation, shopping center, office building etc), then you will be able to find a use for this property that will be worthwhile and could be profitable.

Also, you should think hard about the hydrogen plant. What will worker there and the talent that will be coming there need? If your property could align with some of their needs that will be a great place to start.

Is the property under contract? Do you own it? If you own it do you have any permits on the land? 

Regarding what to build, I will say you could look at what the area close by you needs. Is it a place to stay, a commercial building for businesses, etc. You will have to figure out what the immediate need of people is before continuing

I would suggest you learn how to analyze any deal that comes your way before you decide to but or not buy.

Once you decide to buy a specific property and know the potential cash flow, I would look for how to finance it. There are many lenders you could choose from. Usually, I work recommend you work with a mortgage broker. A mortgage broker usually has 50+ lenders they can call on to shop for you to find the best financing deal that would work for you.

Unlike banks who usually only have their own loan packages, mortgage brokers are able to contact multiple banks/lenders, provide you with offers and then you decide which is the best loan for you.