All Forum Posts by: Ian Plocky

@Frank Teshima, I think that sounds like a great plan. As previously said, you'll need to have an LLC. A commercial lender's "DTI" is DSCR (Debt Service Coverage Ratio) - which looks at the ratio of a properties NOI vs the annual debt service you'll be responsible for.

With all this being said, if you have an LLC, your personal credit score is good - as long as you find a good deal, a commercial lender would be happy to help you!

Hope this helps. Reach out anytime.

@CT Nguyen, what kinds of properties are you looking at? If you are looking at SFR's, I have a few lenders that will lend you 15%. If small multifamily, than 20-25% is more industry standard.

What markets are you looking in?

@Jennifer Kessler - awesome to see another San Deigan here. 

In Real Estate, its hard to make mistakes - your only regret will not be starting sooner. There are good reasons to both buy locally and out of state. 

What are you looking for? If you are mainly looking for cash flow, in the near future, than I would agree that local in San Diego is tough. 

Although it feels scary to trust someone out of state, think about how Zoom-oriented our society has become used to! We have progressed to diminishing the value of in-person business meetings. I would recommend searching for agents on BiggerPockets in areas that you are interested in and set up a zoom call. I believe you should be able to guage a lot of trust via those meetings. 

We have found the most success via agents from BiggerPockets. Hope this helps - reach out anytime.

Omg, @Kellie Davis - what a stacked marketing resume!

Marketing will help you in finding deals. Pretend that finding off-market deals are the clients, and you making an offer on the property it alike to the product you are selling. 

If you can use email, sms, and paid ad marketing to find off market deals, and let homeowners know why your offer would make THEIR life easier (especially if they are an older landlord) - then you're golden!

Best of luck, hope this helps. Reach out with any questions. 

Hey @Janet Balian, 

My company does a bit of wholesaling. Please reach out for any questions - Happy to help. 

Hey @Tommy Dedrick, 

That sounds like a great plan! Although the replies so far may have you thinking that you can't get another FHA - just know that a lot of lenders also have 5-10% down Conventional loans that look a lot like FHA. (These loans DO have a PMI and typically require owner occupancy, but so does FHA)

On that note - FHA requires owner occupancy, so the answer to your question is Yes - you will need to refinance, no matter what, out of your FHA loan before moving out.

The only regret you will ever have is not starting earlier... so just get going and your options moving forward will start seem more abundant!

Hope this helps

HI @Tamer Almasri, 

Congratulations on moving to Houston! 

1] I would rely on @Lauren Cutchen and other agents in the area. I have found the most success with agents found on BP

2] You can get the FHA for 3.5%, but just remember that you'll need to owner occupy the building for at least a year. If you decide that renovations went faster than expected and want to move out in 8 months, you'll need to refinance out of the FHA loan first.

3] Lenders approve you, personally, based on your debt-to-income ratio. The amount of loans you have won't be a factor until you hit about 10 Fannie/Freddie loans. But until then, as long as your debt-to-income ratio is at or better than what your lender is looking for, than you should be able to buy a second and renovate. 

If you've refinanced the first one, you should be able to get another FHA on the second (if you choose to move in).

Hope this helped!

Reopening this, @Stephanie P. - I like the idea of using DSCR to show that I the property I am buying qualifies itself. Do you know a good referral for a commercial lender that would do this?

Hey all!

I’m having trouble finding a commercial lender willing to refinance a 4 unit commercial building I’m about to purchase using a hard money loan.

Of the 4 units, 3 are residentially rented, and 1 unit downstairs used to be a grocery store but now is used as office space.

Beyond my inquiry about willing lenders, I’m also curious as to why this is raising red flags otherwise. Can someone help me better understand this? Even though this building has less than 5 units, it is still considered commercial.

TIA

Ian

@John Blanton @Matt M. @Steve K. @Guifre Mora  

Thanks for all of this!

Question to follow-up on this topic - do commercial lenders typically require single-asset LLCs? I have heard that commercial lenders prefer not to provide loans to LLCs that already have other financed commercial loans/properties. 

Is this true?