All Forum Posts by: Erik Estrada

Quote from @Axel Scaggs:

Quote from @Patrick Roberts:

Couple questions -

What's the rate and remaining life of the $130k first position?

For the closing costs, how much of that was escrows? If you're currently escrowing with the existing first lien, you would be refunded the balance of that escrow account about a month or so after closing on the new loan.

 The original loan rate was high, at 8.75%, new rate is 7.5%. House was purchased in 2017, so restarting it has certainly affected things in that regard. I attached images of the closing costs. 

 You are getting killed on the fees. I would recommend shopping this. 

But in the event you do decide to sell, you can also look into a cash out bridge loan while the property is being listed for sale to purchase more flips. This is very beneficial in markets where homes are not selling as quickly. 

 Delayed payments & 100% Financing? Sounds like a scam or recipe for disaster. 

 Hi Charles, 

These loans are very tricky, and definitely require more upfront work to make sure financing is even possible. Lenders are tightening down on these. 

A few things here: 

1. What kind of building is it? 

2. What was the initial purchase price, cost spent, budget remaining, and ARV?

3. Do you have a mortgage on the property? 

4. What is you credit score and do you have 6-12 months reserves? 

 Sounds like their pipeline is a little too full. The appraisal should have been completed by now. 

Here are the steps needed to close quickly: 

1. Get all upfront docs. (Loan App, ID, Bank Statements, Entity Docs, Leases, Experience, Credit and Background Reports, Third Party Title and Insurance contact info) Once reviewed and all documents have been clarified, submit to the lender. 

2. Order the appraisal on a rush (AMCs typically charge more for this) 

3. Send out Title and Insurance requests. 

4. Loan goes to initial review 

5. Appraisal should come back in 3-5 days and you should also have any conditions needed to submit to final review. 

6. Assuming value comes in as stated, submit all requested conditions along with third party title and insurance 

7. Loan should be fully approved if no other conditions remain

8. Loan goes to Docs 

9. Schedule Signing and Fund/Record. 

Obviously there are a lot of variables (liens on the property, lack of insurance in the area, value comes in lower, or you have trouble documenting a few conditions) but if everyone is moving fast, you should close a DSCR loan in 2-2.5 Weeks.

 Have you tried looking at a local commercial bank/credit union? You will get pretty good rates if you start there 

 Yes it just depends on the state, 

There are a few restricted states when it comes to Business Purpose Lending, and will require closing in an entity. It will also depend on how serious the lender takes into account those laws. 

Happy to connect. 

 Hi Elan, 

Happy to connect in regards to DSCR lending!

 Got it! 

Not on an investment property. However there are lenders that can go up to 90% CLTV (HELOC) on a primary residence.

I am so glad you made this post! 

 Hey Hai, 

I think you might be confused. Many DSCR lenders will lend up to 75-80% LTV on the new appraised value typically after 90 days of owning the property. Theoretically if you bought the home for $200,000, put $75,000 in Reno and the property appraises for $380,000, you should be able to pull out 100% of your initial cost at a 75 LTV on the new appraised value.