All Forum Posts by: Jonathan Taylor

@Juan Zamora 10% down loans for striclty investment properties (no owner occupancy allowed) are not a reality any more. If you are buying a second home and qualifying conventionally, then a second home purchase can be done with 10% down. But more investors buying STRs are putting 20% down using STR specific DSCR loans assuming the rents can debt cover. These loans can have an interest only period of up to 10 years and the DSC ratio is calculated using the interest payment not the P and I. These loans are what is working in this high rate, low Long term rent environment.

@Hoa Nguyen short answer, yes. HM lenders, depending on the lender, want to make sure you are using your cash and not borrowing money that isn't collateralized (secured by real assets). 

Basically you aren't borrowing to the nines and stretching yourself thin. A personal loan (business line of credit, cash advance, loan from a friend, etc) cannot be used as a down payment with a lot of the lenders I work with since these loans are not secured by real assets. 

Types of loans that SOME lenders accept are HELOCs, margin lines, Secured second position cash outs loans on other properties, etc. These are secured by real assets (recorded lien on real property, secured by market stocks, etc. Therefore reducing risk associated with your transaction. So sourcing is a huge aspect to lending and you cannot just fill your account  without documenting where It came from.

@Jordan Fujan Banks will offer a commercial loan structure on DSCR style loans but nation wide business purpose lenders (not banks) are the ones who offer 30 yr fixed terms. You can work with a broker to price you out on 30 yr terms.

 @Gustavo Alvarez Every DSCR loan is whats called a business purpose loan and these have some form of Pre payment penalty. Some lenders allow you to buy the pre pay down with either higher rate or additional cost at closing. Ask your lender or broker what the cost is, and depending on how long you want to hold the loan, it may make sense. But yes, if you prepay the loan in full within the pre pay penalty period, you would pay a penalty to the originating lender as a percentage of the original loan balance. This structure is very common.

@Tianyi Chen are you asking for a HELOC on your investment properties? If so, these are uncommon and not a standardized product. If you are asking about DSCR cash out refis, you can find lenders on the find a lender tool or ask more questions here. Happy to help as I specialize in these types of loans as well.

@Dav Pohote reiterating some of the points here but one note to add is commercial property exit financing is different than DSCR 1-4s. 6 month title Seasoning is low as most lenders require 12 month stabilization for best rates, occupancy percentages of 90+, to name a few. There is some appetite for 5-8 units but I have not seen pricing being favorable.

Regarding the Fix and Flip, my lenders who allow 5+ commercial flips require 5+ experience and the down payments are 25-30% min and do fund some, not all, of the reno. These deals are case by case. Hope that helps

@Rob Schou You have the pick of the litter with find a lender tool. Ask any questions that come up but your best use of time is cost benefit between a second position (blended rate calculation) or a full cash out refinance. 

@Nathan Frost This would be called a portfolio loan but most lenders with this product require a minimum unit count, usually 5 units. Since you have two unit, you can do a simultaneous refi with one lender as they usually give discounts for multi pack submissions. 

@Gilberto Ramirez III If you have at least one property you own and/or have flipped in the last 36 months, an 18-24 month Fix and flip loan would fit your needs. This is if you are not living in it. Some lenders allow ADU builds in the reno, so if the ARV has enough room, this would be a strong option.

@James Brisson 8.99 seems very high without knowing the specifics on the property other than what you sent. Market is mid 7s to mid 8s from what I have been seeing. I would run the numbers on a second position to keep your first rate and the blended rate may be lower than 8.99. This is a way to 1. pay lower origination since you are taking a loan for 100-140k and 2. keep your first note rate in place. 

Would take some noodling, but would be worth it considering the jump in rate.