All Forum Posts by: Jared Rine

@Allison Keng..just adding my $0.02...jumped into the industry a long time ago and if I could do it all over again, I would never have gone to college (I do have a degree), as well as NMLS + CA DRE (I can do real estate if I want to).  I'd recommend getting licensed, but besides the licensing, I'd recommend finding a mortgage broker who is still growing/expanding their business, and someone who's been in the industry a decent amount of time as going through different real estate cycles really lets you see if you can stomach this industry.  Not to deter at all, but there are tons of people leaving it because it's seemingly tough out there.  Hope that helps.

@Kevin T...how long have you owned it? If that's true value and you have owned for a good amount of time and it's easy to see the value, then you should be getting the land as equity in the deal. It should be piece of the 'cost' technically, and you should get value for it as part of your equity in the deal, and hopefully not have to bring cash in, or at least not much, assuming your completion LTV is solid. It's very lender dependent and tough to give you more than a general answer without seeing the rest of the deal. Just my $0.02... I agree much with @Nick Belsky

@Brian Ronning...you'll likely have more flexibility with a DSCR loan when it comes to loan terms as some posters mentioned. Most lenders in the space have different ARM (adjustable rate) + Fixed rate options. 30 Year fixed is a standard, and some of those if you really want to maximize cash flow, will come with some interest-only basis, where say the first 10 years of the loan term are interest-only and then the loan rolls into an amortized basis. And you can vest in your LLC. You'll want to get with a trusted mortgage broker who does these loans. I'm in that category, but there are many on here.

@Grace Santos... hopefully this adds more clarity I don't know everyone who posted, but @Stephanie P. and @Alex Bekeza know their stuff too.

It's lender dependent, but given that you're likely working with a licensed broker, who can bring you some completely wholesale DSCR lenders (basically lenders that CANNOT AND WILL NOT go borrower direct), they will usually disclose differently than say a lender who is marketing directly to borrowers. As a mortgage broker who also uses these sources in addition to other borrower-direct lenders such as Easy Street or Visio, my disclosures would likely look like the ones you received. We pull personal credit; get the mortgage statement for your primary, etc. and while we ask for entity docs and will vest in an LLC/corp/etc, that won't be on the loan disclosures. It sounds fine and I've used Oaktree to do DSCR in the past (my opinion and not to discourage - I don't know your situation, but I don't think they are best priced right now). Just my $0.02

@Satya Y...how flexible are you on terms?  There are lenders who will do HEL on investment properties, but they aren't cheap.  But as you mentioned, at least they are fixed.  If you're okay with that and are just looking to get the equity and okay with what your 'blended' rate would end up being, then please reach out and I'd like to hear more.  The HEL's are full doc though.  Feel free to PM. 

@Jabari Seabrook..I appreciate your lengthy and detailed post, however please take things with a grain of salt, even including what I'm going to tell you. I'd agree that DSCR or some type of non-qm program (p/l only, 1099 only, etc) with DSCR likely being in the forefront.

Full disclosure, I'm a mortgage broker in CA and based on what I'm quoting (TODAY), rates are definitely NOT starting at 8.75% unless you're talking to the wrong mortgage broker.  Obviously this will be dependent upon certain factors as some of the responders mentioned, but even at higher LTVs, you should not be getting to this range unless you absolutely have to.

You mentioned the completed value ~$800,000.  What do you owe or will be owned on the project?  Are you doing the project all cash?  When will it be finished?  

It'd be good to know what type of LTV the refinance will be at.

I'd recommend that you work on getting your credit score as high as possible. Most lenders do want to see above 680, but there are lenders out there who do DSCR loans with lower credit borrowers.

If you need more info, feel free to PM. 

@Jeff Puciato..might be worth looking into a DSCR loan, depending on how many units you're buying and if you're okay buying for investment vs living in one the units (if 4 units or less). I've done investment/DSCR deals in New Haven, CT and the market is great from the little I know about it. OR you could call around to local banks/CU's and ask how they underwrite. Sometimes banks might collect a full document package, but really when it comes down to it, are only underwriting the property (if you're buying for investment). I have had this happen also with other clients - where we HAVE to collect everything more for a compliance edge vs. your personal income actually taken into account. Just my $0.02

@Ben Sturgill..there are loan products out there that should allow you to do this, assuming your properties/you qualify.  So you'll bundle 5, then rinse, repeat?  Is that correct?

@Ryan Cleary...I second with @Alex Bekeza; Most DSCR lenders will have 6 months PITI reserves as standard, worst case 9 or so. I've had deals get skinny - down to 3 months in some circumstances. Reserves also don't have to necessarily be liquid funds (Can be retirement, 401k, stocks,etc) nor do lenders hold these funds. You should have no issue or find a mortgage broker who really knows what they're doing.

@Steve Wolfrey...commercial only. But that doesn't rule out DSCR as it sounds like it might be heavier residential than commercial. Not all lenders will do them on mixed-use but some do. So you still could potentially get away with NO personal income documents being collected. What's the price point?