All Forum Posts by: John O'Leary

 I think newer, less established, and daisy chain Wholesalers often don't consider the needs of the end buyer (investor) when underwriting properties. Their focus is on maximizing their markup rather than accepting a smaller profit to ensure the buyer can profit from the rehab and become a repeat customer. Many wholesalers fail to understand the long-term value of maintaining strong relationships with buyers.

As a general rule, If tenants occupy the property for 30 days or more, they are generally treated like long-term tenants, with the primary difference being specific terms in the lease agreement tailored to the mid-term duration. However, if the occupants stay for less than 30 days, the rental is typically considered a short-term rental and subject to different regulations.

Hey Kwame,

I'm in Orlando. What are you specifically looking to do/learn? 

Hi Kiefer,

It's great that you're immersing yourself in learning and have already taken the first step with your duplex. I would start by getting clarity on what specific area within REI you want to focus on. Once you have that clarity, build a team around you—this could include a real estate agent, a lender, a mentor, contractor, a solid title company/Attorney and possibly a property manager etc. With a clear focus and a solid team, you can take massive action confidently, knowing you have a strong foundation to support you.

Best of luck on your journey!

 Read Dennis's post above. 

@John Cardinale 

I meant that you can use a hard money lender that offers DSCR products, as traditional lenders do. Lenders will require the borrower to have the 15-20% down payment plus any reserve requirements for underwriting purposes.

Regarding your question: Are you asking if you need to have the 20% difference in cash to bring to the first mortgage closing and then have the seller lend it back to you right after closing? Or are you considering having the seller front the money for closing and then record the second mortgage immediately after?

I've seen both approaches. The seller may place the 20% in escrow, secured via a promissory note, and then record the second mortgage later. While the lender doesn't want a second position at closing, there's usually nothing preventing it afterward. It ultimately depends on the specific underwriting requirements of each lender.

Use the hard money to get 80-85% of the purchase price on a DSCR loan, (assuming this is turnkey) and use seller financing for the 20% down payment. Have the seller hold a silent 2nd until the 1st position lender records the mortgage than have them attach the second. You will need to show you have funds but this is a strategy regularly used.

When it comes to securing financing, most lenders will expect you to have some skin in the game. Typically, this ranges from 10-15% down for short-term value-add loans like bridge loans, and 15-20% down for turnkey purchases requiring long-term financing. If you're having trouble finding a lender who offers 100% financing with no upfront costs, you might want to explore using a HELOC on the equity you already have to fund your initial investment purchase. Wishing you the best of luck in your endeavors!

Maybe refinance to a DSCR loan in the LLC. DSCR loans are typically not reported to credit agencies.