All Forum Posts by: Jacqueline Wright

It sounds like you're dealing with a potentially suspicious situation. 

It's wise to verify the credentials of anyone involved in a significant financial transaction, especially if they are requesting proprietary financials.

For a cash-out refinance on a vacant lot, finding traditional lenders can be a bit tricky as most focus on developed properties. However, you may have better luck with local credit unions or private lenders who specialize in land loans. Additionally, consider exploring hard money lenders, as they often offer flexible options for tapping into land equity, although they come with higher interest rates and shorter terms.

Another option is reaching out to land-specific lenders or specialty loan providers who may offer land equity loans. Be sure to compare the terms and fees before making a decision!

It sounds like a cash-out refinance or a HELOC could work well for your situation. Here’s a quick breakdown:

• Cash-Out Refinance: You’d pay off the existing mortgage (the $45k balance), get a lower interest rate, and pull out the additional $20k. The advantage is you lock in a fixed interest rate for the life of the loan. You can also refinance again later to pull out more cash if the equity increases.
• HELOC (Home Equity Line of Credit): This would allow you to take out $20k as needed while keeping the current mortgage in place. HELOCs often have variable interest rates, and you can borrow more in the future as you pay it down.

If you're looking for long-term stability and want to lower the interest rate, cash-out refinance is probably the better option. But if you want flexibility and quicker access to cash in the future, HELOC may be more suitable.

Yes, you could do either option again later if your property builds more equity!

For private money lending in South Florida, it's important to find an attorney experienced in real estate and lending practices. 

Reach out to local real estate investment groups or forums. Members often have recommendations based on their experiences with attorneys in the area.

Yes, DSCR loans can indeed be used for refinancing self-storage properties, not just residential investments. Many lenders offer DSCR financing for commercial properties, including self-storage facilities, especially in the $700,000 to $1 million range.

Ensure your self-storage property has a strong cash flow to meet the DSCR requirements. Lenders typically look for a minimum DSCR of 1.2 or higher, meaning your property's income should cover 120% of your debt obligations.

Your experience with the DSCR loan process sounds frustrating, but it's not entirely uncommon for borrowers to encounter last-minute changes, especially in complex transactions like cash-out refinances.
Reach out to your loan broker to get a clear explanation for the changes in terms and fees. Ask for documentation that justifies these alterations.

It's essential to feel confident and informed throughout the lending process, so don't hesitate to advocate for yourself and seek out advice or alternative options.

To effectively source Private Money Lenders (PML) and non-traditional lenders, engage with real estate agents, mortgage brokers, and property managers who might have connections to PMLs or alternative lenders.

For your client's cash-out refinance on an adult family home in Washington State, it would be helpful to reach out to lenders who specialize in DSCR loans, especially those experienced with unique property types like adult family homes.

Contact Local Lenders: Start with local banks and credit unions in Washington that offer DSCR loans, as they may have specific programs tailored for adult family homes.

To get started on your ADU (Accessory Dwelling Unit) project, here's a tip:

Research Financing Options - Since you have good credit and a HELOC available, consider using that for flexibility. You can also look into personal loans, construction loans, or specific ADU financing programs that some lenders offer.

Starting a private money lending business can be rewarding, but it requires careful planning and a solid understanding of the real estate market. Connect with real estate investors, brokers, and other private lenders. Networking can help you find potential borrowers and investment opportunities.