All Forum Posts by: Erik Estrada

 Once you're already in the industry, and actively working these unique scenarios, the lenders will fall in place lol

 You are assuming that real estate is a safe bet. Maybe for buying your primary and riding appreciation, but real estate investing is all the more risky than investing in stocks. Actually, even riskier since you have more to lose. You are spending thousands of dollars on fees, property expenses, attorneys, listing commissions, lender fees, inspection fees, etc.. and if you pull it off, then maybe you can make a profit. Sometimes you can pour your life savings into the property, and because of market conditions, end up being sideways on your deal. 

I am not here to be a negative Nancy, but you have to be prepared for that. What if nothing goes as planned? What is your exit strategy? How will you address this to your clients? People are going to ask you all the questions, and you cannot just hide and wipe your hands clean. 

 Hustle and save aggressively. Look into high income positions, high ticket sales, or low barrier to entry flips. 

There is no quick shortcut. Sometimes you just have to put your head down and pay your dues for a little while, get your finances together, and then start with simple transactions, slowly building your way to multi unit complexes. 

You should ask yourself, why would an investor trust me to manage their money? What value do I have to bring to them? Do I have anything to show for it? 

 Do you have a Loan Estimate to share and see what these fees are? $68,000 in fees for $161,250 Loan Amount is insanely high. I don't even think you would pass compliance on something like that. 

 Hi Ying, 

Most conventional lenders will not allow you to close in an LLC. There are some instances (Mostly Portfolio Style Banks) where they can allow it. But it typically won't be on a Fannie/freddie Mac loan.

The DSCR loan is not too far off in rate compared to a conventional loan. The main drawback is the Prepayment Penalty Period on the loan. Some DSCR lenders have a no PPP option however the rate and/or the cost will be higher on these. Closing in an LLC is allowed on these loan types.

Most Insurance carriers should allow you to have the Insured Name as your LLC. In terms of a cost standpoint, the insurance is typically higher on a Rental (Do not quote me on this, just giving you information based on my dealings with insurance on the mortgage side). I am sure you should be able to work out a deal with your insurance agent on a policy covering multiple properties.

As for the benefits for closing in an LLC compared to personal name, I would suggest contacting a tax professional and attorney, to see what will suit your needs.

What is the purpose for him being on the refinance? Did you recently open the entity you are going to close with on the refinance? What is your ownership percentage in the company? And was he also on the company when it was initially formed? 

 Hi Celso, 

Happy to connect 

Are you a broker?

 What terms are they offering? Do they have any licensing/ reviews?

 I think if you are shopping it, you should have a PDF of your full scenario and email it to the lender. 

The PDF should include the following: 

1. Address 

2. Purchase Price

3. Rehab Cost 

4. Current Market Value 

5. After Repair Value 

6. Long term or short term rental income (actuals and estimated market rent) 

7. Annual taxes 

8. Annual Insurance 

9. FICO Score Estimate 

10. Investor Experience (I.E. How many rentals do you own, long term and short term, How many Flips have you completed in the last 36 months?) 

11. Any pain points on the deal? (I.E. Rural, small square footage, Sub $100k Value, Lack of Experience, Credit Lates, Higher Lease compared to market rent, seasoning, Below 650 Fico, or any strange circumstances) 

Once you get some rough terms, structured specifically to your scenario then I would base my decision on reputation, visibility, and overall communication skills. 

What I commonly get is an Investor that is trying to get to the rate, without giving me any information. That's as good as sticking gum on the wall and seeing if it will stick. You will be spending hundreds of dollars on an appraisal, weeks going through the process and you may come and find out that this lender that told you what you wanted to hear, changes the terms on you the day before closing. Make sure you do your due diligence, and don't call blindly.