All Forum Posts by: Jesse Flores

Rates on investor loans for a purchase range from 4.25% to 7.99 with a lot of variables that affect the rate.

Yes, cash flow of the property is a driver to determine your DSCR, but credit is a driver as is LTV. Your personal cash flow doesn't matter, but your cash reserves do. On a purchase, I've seen LTV's as high as 80%.

Stephanie

 @Stephanie P. Thanks for all your suggestions.  I do have options and am also thinking of doing some IT contractor work.  This will work itself out eventually.  Thanks again!

 Regardless of the number of units, it is residential real estate if the primary use is housing. Apartment buildings are residential real estate as defined by tax code. You may mean "owner occupied", but I don't think the OP is occupying the property. What I meant by commercial loan is non-conventional lending where they underwrite based on cash flow. You can absolutely finance a portfolio of small multifamily or even single family with loans like this. Here is just one example of a lender who does this. I have no experience with this lender, just using it as an example:

https://www.foacommercial.com/...

@Jesse Flores you should be able to get a commercial loan. Or buy it cash and refi with the commercial, which it sounds like you might have to do to secure it. Leave enough in so that you can easily cover debt service and expenses and draw some. You may be looking at 60-70 loan to value 20-25 year amortization and 4-6%.

No comment on whether it’s a good deal or not, don’t know potential rental increase, taxes, ease of management, appreciation potential, market blah blah blah.

Depending on how you structure this could be a nice little savings account with a great % return compared to those types of accounts. But it will cost you some of that cash.

@Jesse Flores

There should be some Mortgage Brokers in the area that can lend “unqualified money”.

*I’m not an expert on this* but the pieces I’ve put together is that to the consumer it feels like a hybrid between conventional and private/hard money. They seem to still be able to do 30 year mortgage but interest rate might be more like 6%. They don’t use income to “qualify” and instead use the asset you’re purchasing. Sure 6% is higher than 3.5% but when you’re purchases a rental property with a 15% return - it’s a small opportunity costs.

A lot of lenders/brokers have access to different products and if one lender can’t do something they’re likely to say “it can’t be done” when more likely they just mean “they can’t do it” - so continue to call mortgage Brokers and ask for “unqualified money” mortgages.

I’m sure I still have a lot to learn on this....but it’s what I’ve gathered so far. So Keep calling around. I think there is a mortgage broker search function on BP, and likely if you keep calling that list, someone might be able to connect the dots.

@Joe Hammel I am looking into commercial and or unqualified loans.  Even checking on getting loan against my retirement.  Thanks fir the input advise!

@Jesse Flores have you tried a hard money lender? That may be an option or obtain a job position temporarily for income

@Jesse Flores

What state are you in/buying in?

Jesse,

You need to be properly capitalized with income to support the debt service. 

@Jesse Flores

Hi Jesse,

If you have no income you can do a non-qualified mortgage with the income from the property covering it’s self.

Generally these loans are anywhere from 25%-30% down and lowest FICO for qualifying is 650.

Interest rates are around between 6.74%-8.99%.

Generally investors will use these loan types if they can not qualify for a qualified mortgage or they have a special income situation.

Just another option you can try if nothing else is coming through for you.

Regards,

Crystal

Waiting on rates to get better is a fools errand.  We are at historic lows and we're in a rising rate environment.

Lets talk Money!  So, my first question to you is how do your 2020, and 2019 taxes look?  Is there income?  If so, from where?  Is it the sale of homes?  If you have capital gains income for 2 years (possibly 3 years depending on if I use Fannie or Freddie), I may be able to use that as an average.  If we do go this route I am also going to have to show 3 years worth of forward income as reserves.  So if you made an average of 100k/yr = $8333/mo.  I would also need to show you have $300,000 in withdrawable assets.