All Forum Posts by: Joe Dillamore

@Sean Quinn The majority of loans to real estate investors are done to LLCs, but they are underwritten using your personal FICO score and most require a personal guaranty, so the "corporate shield" won't apply. So as a general rule: "yes," you'll want to purchase through an LLC, but "no," you (usually) won't have less liability if the proverbial hits the fan.

@Tianyi Chen HELOC + Hard Money --> DSCR is a well trodden path. You just want to ensure that you're adding enough value to the property to cover the cost of the short-term financing

@Zane Cress I'm based 1h30 away in Greenville SC, but work with a host of lenders that lend in GA, including a few local. That timeline shouldn't be an issue with a good lender

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@Thomas Santella There's definitely an advantage to sourcing local, but you don't have to use a lender from St Petersburg to do construction there!

@Gajendra Singh Rathore DSCR is bread and butter for a huge number of real estate investors. Whether or not it's a good product for you to use really comes down to your investment strategy.

Where are you at in your real estate investing journey? What are you hoping to achieve.

@Dionne Ladson The proof of the pudding is in the eating.

True private money (e.g. a high-net worth at your local REIA) is going to be more flexible, but make you vet them before diving into a borrowing relationship. They're sometimes more expensive than hard money lenders (not always), but typically lend more than a hard money lender will, especially if you're unexperienced.

With hard money lenders, flexibility is typically a function of size. If you find a local, smaller hard money lender, they can be a great partner to scale with. You will usually get the best pricing with larger lenders (again, not always) like Kiavi and Lima One, but don't expect them to have you on speed dial.

@Michael Nelson On a purchase, 80% is doable. On a cash out refinance, lenders are more conservative. If I were you, I think you'll be spinning wheels trying to get 80%.

@Alex Ng What are you looking to do when you say "scale"? What have you got going on already?

@Wes Holmes Just to add a bit more meat to the bone of what others have said:

It's standard practice for hard money lenders to require a personal guarantee, but once you have significant experience under your belt, lenders are sometimes willing to drop the requirement for a slight decrease in leverage and/or increase in rate.

Regarding extra collateral, lenders sometimes ask for this if the deal is too high risk for them as-is, but you have significant equity in other properties that make it wash. However, it's not standard.