All Forum Posts by: Dennis Muno

 Hello Kevin,

I will recommend that you compare financing options from a couple of lenders before you proceed. For new construction loans, how much experience(buying, selling, rehabbing investment properties) do you have in the last 3-5 years with your name on title(not your builder)?

Some lenders may ask you for that. Hard money seems a way to proceed.

Do you own your primary residence? Do you have some investment experience? What property type are you looking to BRRRR?

A hard money/bridge loan(interest only) seems to be the way to go. Usually if you qualify, you can get up to 90% purchase+up to 100% rehab to buy and rehab the project for a start. Obviously every lender and their qualifications will be different. Unlike FHA, VA, Conventional loans, hard money/bridge have variable requirements depending on lender

 Hello Eric,

I don't think this will be a DSCR loan property. This is more of a commercial property that will need financing.

What is the purchase amount? Will you be doing any rehab? Commercial financing is the way to go

 Hello Jae,

Not every lender likes to do HELOCs on investment properties. Also, in TX that is not legal, I believe.You can't do HELOCs on investment properties in TX.  Some lenders are open to doing an equity loan although not all lenders are thrilled with being second position on an investment property when it comes to pulling equity out of the property.

 Hello Fallon,

Like many have said here- a conventional cashout refi seems to be the way to go. Even with that, not all lenders will be thrilled. There will definitely be a few that will be willing to make an exception and assist but they'll be few

 Hello Michael,

It depends on what you are trying to do. Also don't forget you'll need money for closing costs in addition to a purchase downpayment.

Questions:

Does the property need rehab? Then you'll need hard money or bridge. Some lenders will lend up to 90% purchase and 100% rehab.

Is the property in good condition? You could use a DSCR loan. No personal income needed. Your FICO will be checked. Rents will need to cover PITIA(principal, interest, taxes, insurance, HOA).

For DSCR most lenders require 20% down+closing costs. However, some lenders require 25% down for a first time investor.

Do you already have an FHA loan? If not, you could try an FHA loan(minimum 3.5% downpayment) and buy a multifamily(1-4 unit). You stay in one unit(you are required to for a year), rent the rest of the units out and then use the tenant's monthly rent to cover the mortgage payments.

If you have 45K I won't recommend you using all that if not necessary. You never know what will come up after you buy. Life happens.

 Hello Dustin,

It seems for this scenario you could do a bridge interest only loan. Bridge financing is usually based on a percentage of either the post construction value or the cost, whichever is the smallest. Usually lenders will give up to 70% ARV(value of property when completed), usually 65% max to pay off the current $26K loan you have and then the rest of the money for completing the project. Usually, this amount is enough to get a payoff as well as money for the construction project. As long as you do the project and make the interest only payments monthly you'll be fine. You'll need a general contractor(licensed) to get financing approval.

It's even better you that you at least have the land. Once you are done with the project, you'll then need to refinance the loan to a more stable loan since this type of loan will be interest only. 

Having some experience will  boost your application. Having permits, an itemized budget, and a plan for the project will make lenders want to assist you even more. 

 Hello Susan,

I just read your post. Currently, with interest rates at 7% or a little more for residential rates, 5% private money for investment properties will just not happen. Investment loans(especially private money) will usually have higher interest rates than residential loans usually because of higher risks and lower requirements usually. So be very suspicious about someone who says they will lend you private money at 5%. It seems like a bait and switch. Or you'll pay a ton in fees and points at closing that may negate you getting such a loan (if even possible in this current market) with such an interest rate

A cashout refi a DSCR could be used. DSCR loans usually start at 1% more interest than residential loans. You don't show personal income at all. Depending on how much repair will be needed, a DSCR loan may not work. Not every lender likes to do DSCR cash out refi loans on properties that require signifcant rehab.

 Hello Louie,

While financing for mobile homes may not always be easy to find, it is not impossible to find. There are many lenders who do such financing. It'll just be an issue of finding lenders who do such financing. Private money, maybe commercial may be ways to proceed with financing such a project

 Hello Parker,

While property values have gone down(vary from place to place; real estate market to market) your property appraising 50% less is problematic and unusual. Is there a reason why? Is the property in good condition?

Something is definitely wrong here.