All Forum Posts by: Erick Caffarello

@Erick Caffarello

For private lending, If the conditions are right, there is at least one lender I know of who will do a DSCR purchase at 90LTV with no PMI...

For example, a property appraises at $125,000 but the purchase price is $87,000.  A well under market price...  This lender will allow up to 90LTP (loan to price).  No extra hit on rate either... the conditions just have to be right.

Cheers!

Hi Erick! I'm going to be a little more creative and ask what the problem is that you are trying to solve by getting rid of PMI or having 10% down? Instead of trying to open a safe with a blunt force instrument, maybe coming at it from another angle with another tool may crack open the safe. I ask because if you are talking about PMI and wanting to avoid it - as a lender that makes me think that a borrower is potentially looking a thin deal and they want to increase cash flow by avoiding PMI. Most PMI is based off the loan amount, and can range from anywhere from $20 to $200 a month, usually the larger amount being for very high dollar and high LTV loans. If $40 a month in PMI pushes the deal into negative cash flow, this may not be a deal worth taking down.

On the 10% down front, again this is usually a reflection of the need for an investment property requiring so much capital just to purchase the property, or potentially a worry about decreasing cash outlay to increase ROI. Both of these are very different scenarios, but if limitation of capital is a consideration this may be a great opportunity to evaluate the type of real estate investing you are wanting to do, including WHY that type of investing gets you closer to your personal goals and lifestyle you want to attain. There is a lot more to real estate investing other than buying rentals for example. There are people that buy distressed notes, others do wholesaling, still more do property management. So just take a moment to figure out what you want to do, why you want to do it, and how can real estate investing get you there.

If you feel that the current route is what you want to do, there are options to expand your capital to take down a property. A mentor/mentee relationship may be helpful where you can partner with someone who knows the ropes and can help you through a deal and maybe invest alongside you. Another option is including those in your network to come along in your journey with real estate investing. They could bring their capital and you bring experience or some other needed skill for the business model for that property.

Good luck in your journey!