All Forum Posts by: Dustin Lauer

 I use a software called RentFax Pro often in Atlanta if that's helpful there.

@Mike H. Great thread. There are many terms and guidelines that our industry does not have standardized. I totally agree that some standardization is needed here. I know that a lot more clients would work with me over some other options if they fully understood the assumptions underwritten by some other lenders that might appear more attractive. Because of all the variances in the calculation Debt Service Coverage Ratios will vary depending on the amount of "debt service" per unit required by each lender. Maintenance, Capex, Vacancies, Lease Ups, Insurance Requirements, and Management Costs are all variables that will widely change the DSCR calculation. I think it is fair for Lenders to model assumptions within a portfolio as if they were to have to take the properties back in the event of foreclosure, but it would be nice for all landlords to have transparency to how this is calculated. DSCR is the main driver when underwriting the financing of a portfolio on it's global cash flow, so it's really the crux to the equation of how much a portfolio lender will give you.

@Daniel H Truex You can do it, one unit at a time.  Each unit you add means you have another $5K + per year to invest.  Some of my biggest clients and wealthiest friends started out with 1 duplex.  You can do it too, one unit at a time.  Also understanding how to use leverage appropriately is key. 

 Nice - We have been pretty active in Patterson and NJ in general if you check us out!  

@Tim Ball If you email me the spreadsheet and I can qualify it, you can sell the package with financing.  If I bring $500K to closing around 6% your Buyer will only need the balance, their cash on cash return will now be a lot stronger, and he/she can afford to maybe buy 2 of these deals from you.

They might need to use a financing source that will qualify the deal based on the NOI and DSCR as the determinate for the loan offered instead of personal DTI and other typically utilized metrics to qualify loans from banks.

You should always do what is best for your business and your family.  Also if you raise any of the money that you invest, then you owe it to your equity partners to make sure you are doing the best you can for everyone's investment.  Using one lender is great for what you mentioned, but it's also great for accounting, servicing, and the management of your business.  Using multiple is great also as many (other) lenders will not always price as aggressively as they could afford to earn your business.  

Great thread Akash.  I think it is very valuable having a strong relationship with a lender.  In today's day and age there are always many options online, but when you're talking about investing your hard earned money a reliable and responsible fiduciary lender relationship is a must have for investors, no matter who you use (I know I'm a lender, but there's a lot of value in what this other investor shared with you to make sure you form a relationship where you are financing your investments).

@Kyle Manduch how much leverage are you looking for?  Are you investing in properties worth more than $50,000 each? The $50,000+ value per asset really opens up some doors in Detroit.

Yes. Great strategy! This is how many investors get rich in the residential investment space and really build their cash on cash returns.... Even 80% LTV (the new value) exists from some sources depending on your financials and your market location, but there are lots of factors to consider. I just posted about seasoning requirements (here - link).  Can you share some details about your typical buy prices, rehab costs , ARVs, rental incomes, annual taxes and insurance costs?