All Forum Posts by: Josh Calcanis

@Jim Spatzenfeld great information! That helps with a unit that isn't rented yet and/or remodeling. Technically once you get a tenant in there and refinance the value could go up if it's based on income correct?

@Nick Belsky Thanks again for the detailed breakdown and spitting the truth. Only 5 doors in and I swear everytime I get on here or talk with someone in this game I learn something new.

@Anthony King - David M hit it. My lender I've used for a refinance before wrote up a DSCR and estimated PITI for me but he was clear that it wasn't going over the 4 unit minimum, but based on what @Nick Belsky has talked through it is up to the lender.

Nick thanks for the explanation of the vehicle to qualify for the loan. Appreciate the note on the CPA as well!

Thanks @Nick Belsky

@David M. that's good to know and very useful information. So it's in my best interest to stick with the plan of leaving the properties in the LLC - I'll read through that thread as well!

@Joshua Janus nice! Are the capital requirements or reserves the same as a conventional? ~6 months mortgage? Or does that go out the window if you've got the income to cover it? 

@Nick Belsky So what I'm reading is that the way to do a DSCR loan for something larger than a 4 unit would be with a commercial lender? If the income covers the mortgage is that all it takes for the DSCR?

Thanks @Jay Hurst - the doc stamps are why I'm looking into the DSCR. They're already in my LLC and to do the fannie/freddie conventional they need to be out (which you just mentioned).

@Nick Belsky thanks for the detailed breakdown! When it comes to pre-payment penalty that would only be considered paying off the loan instead of doing a refinance right? Technically the loan is paid off in a refinance. Good to know on the 20% and as someone mentioned earlier seems like the rates are about the same?

From my understanding DSCR is only for up to 4 doors? Anything over is commercial and a different type of loan or am I misunderstanding that?

Thanks @stephanie p.!

@Luke Carl interesting to hear that about AirBnB - I've got a friend here in Florida that does a brilliant job with his STR holdings on AirBnB (also on BP - Travis Zappia). While he's mentioned how AirBnB doesn't really support it's hosts as much as he should he's got quite the process built up.

I'm currently only in the LTR space, but have been inspired by the cash flow for those properties and the financing for them. Could you detail the VRBO and direct bookings a little more for me? What's the difference for those two? Also just ordered that book.

Thanks @Jay Hurst that makes sense. As a lender, do you have some thoughts on the cons for a DSCR compared to traditional loan? For context, I'm trying to figure out if it's worth it to do a DSCR cash-out refi with the higher rate versus quit claiming the properties back into my name to do a refi. Weird stipulations that I've got with this lender that allows me to place the leveraged property into my LLC, but I can't refinance unless it's in my name.

Hey BP - I'm finally on the hunt for some new properties for 2022. I've been pumping up the other portions of my portfolio and putting a lot of my time into our startup (which we'll hopefully see an M&A this year), so I'm taking my time getting acquainted with some other forms of financing. I've done the traditional loan route, the cash-out refi and use that capital for another property, and then the FHA route (BRRR).

Through my research and talking with two lenders (one I've used the other is a referral) I've come across a DCSR loan. It reads as a commercial loan, but I still can't get something over 4 doors. It also seems to have some early payoff penalties and higher rates than a traditional investment property loan. The one benefit I've got and why I'm looking at it is the fact that I could get the loan without having to Quit Claim the properties again (all units are in my LLC).

Does anyone have some general advice or experience with a DCSR loan? Would you use this as your last resort? Is there anything I'm missing?

Hey BP - I've been on here since 2015 when I bought my very first SFH. I'm now in multi-family and want to take the next step into a larger multi-unit complex. I've got a decent amount of capital from a cash-out refi and savings, but I'd prefer to use OPM. I feel I've got a few contacts that would have the capital and ability to lend. With that said, I want to be as educated as possible when it comes to structuring a private deal.

- Is there any difference in a hard money loan and private lending when it comes to doing a refinance after you raise rents/lower expenses?
- Is there a big difference in interest rates between the two? I'm assuming negotiation on the private money can be a little easier.
- requirements of getting the amount? I've seen 30-40% still required for a 'commercial' deal under a hard money loan, but don't have much info on private deals.
- how does the process work once you have the cash in hand?
- For a private deal the return on their money would probably be more important (thus a lower interest rate?) so what's the typical calculations/timeline for that?
- Does it make sense to do a  private money deal with multiple investors? With crowdsourcing allowed now, curious to know if anyone has had something like that done.

Looking for any feedback from those who have done this!

Thanks @Kevin Gidusko - I haven't been there yet, but I'll add it to the list. I frequent The Guesthouse since I can walk there haha.