All Forum Posts by: Jose Bernard

#Tbt About 12 years ago I quit a 6 figures income sales job, took a loan against my 401k and decided to open a food truck business with 0 experience in the food industry. I was catching up with a good friend this morning, and he reminded me of that experience. This was one of my first business ventures and an incredible learning & growth experience.

The business did great in the summer time, but sales dropped by 90% in the winter. In an effort to sustain the busines during the winter I went broke with close to $0 in my bank account. I struggled financially, mentally and i was physically exhausted since I had to let go of my employees and do everything myself. At that time I was faced with figuring out how to turn what many would consider a failed business venture around. After many struggles and setbacks I figured to go back to work at a job, and keep the truck as a seasonal business. The business was very profitable during the summer time, I kept it for two seasons and sold it making an additional $35,000 profit, which I invested in real estate.

The upside was not in the money I made, but on the immense experience I gained. I learned that there is no upside without risk, I'm not afraid of lossing money because money can always be obtain again, the satisfaction of going after your dreams and making your vision a reality is second to none, and it doesn't matter how bad it gets there is always an opportunity to learn and grow, and often times the upside is right around the corner from your biggest setbacks.

Ps. The bike with the cooler and engine attached was my invention to use for deliveries 🤦🏽‍♂️🤣

3 Votes

Quote from @Jay Hurst:

Quote from @Jose Bernard:

As we all know, in the recent weeks Fannie Mae changed their seasoning period requirement for conventional cash-out refinances. It changed from 6 months to 12 months. I'm wondering, what is your take on how these changes affect the Brrrr strategy and RE investing as a whole?

@Jose Bernard I have posted this before on similar threads:

There are options so you would need to map those out with your loan office BEFORE you purchase. We do it every day so it can be done with non conventional products/bridge loans etc. but you just have to have your plan in place.

And keep in mind these new Fannie/Freddie seasoning requirements ONLY apply to cash out loans. In other words, you can still use the improved value to refi what is owed with no cash back. So, what we do on we make a HML is once we get the take out appraisal to establish the value we will modify our existing HML to raise the loan amount to the max loan to value for the take out product, then proceed with the refi. This makes the take loan a rate/term refi NOT a cash out so we can use the new value. The result is you get the funds you wanted without having to wait the now 12 months, and still refi into a conventional loan.

Or, if you did not do a HML loan with us we do a double close essentially. We do a cash out loan for you on a bridge loan with no pre-payment penalty pulling out the cash, them immediately refi that new loan amount as a rate/term. So, again, it just takes a good LO, and a plan.

Thank you @Jay Hurst. Those are great strategies to get around the new changes. Thanks for sharing.

0 Votes

Quote from @Robin Simon:

Quote from @Jose Bernard:

Yes - as the other commentators have suggested, DSCR loans are the ideal option to replace conventional with in these situations. However, always remember that its not necessary to cash-out using the BRRRR method - especially with a good amount of pressure on home values and rates still high, BRRRR investors should be open to lower leverage refinances that make sure the property is comfortably cash-flowing and going with rate-term refis when appropriate

Hey @Robin Simon that's a good point. Thanks.

1 Vote

Quote from @Jim Duncan:

Yes, DSCR loans would be the way to go, I would think. A few of the wholesale partners we work with allow us to even offer a "delayed financing" option, so that we can actually do a DSCR cash out on a free and clear property within those first 90 days of ownership. Seems like a very useful solution for people who scoop up something for cash, but then need to get more liquidity again.

Hey @Jim Duncan the "delayed financing" is a great and very smart option. Thank you for the feedback.

1 Vote

Quote from @Forrest T Schue:

I recently posted a similar question. There are some good responses on there if you wanted to check that out.
The consensus was pretty much DSCR loans. After consulting with my lending agent it does seem like the best option under the right terms. For me that might look like Interest only payments, with 6 months or below seasoning on a cash out, and no pre-payment penalty.
I imagine that with conventional loans now being harder for investors to use, more investor-friendly lenders will fill the void. I hope!

Thanks @Forrest T Schue, yeah DSCR is what I thought most investor would start leaning towards. I will check out your post as well. Thanks

1 Vote

Quote from @Alex Bekeza:

@Jose Bernard For now, many investors are pivoting to DSCR loans, some of which will offer 75% cash out based on new appraised value as early as 90 days of ownership.

I agree. DSCR loans are my financing go to product as I'm capped at how many conventional loans I can have, and I don't have a W2 job anymore. I'll love to chat with you regarding your 90 days seasoning period refinance option. I'll send you a message.

2 Votes

1 Vote

Quote from @James Carlson:

@Jose Bernard

We're not local, but we've done a lot of medium-term rentals here in Denver and Colorado Springs. More money than an LTR, less work than an STR.

If you end up going that route, you might check out "Erin's Guide to Midterm Rentals." Some really good tips and checklists on setting up and operating a midterm rental. Good luck!

Thank you @James Carlson. I read it, and found good tips in it. I'm picking up Erin's book as well.

0 Votes

Quote from @Samuel Eddinger:

Did you talk to @Stephanie Cabral at the meetup about this?

I didn't get a chance to meet her at the meet up. But I will reach out to her now. Thanks

0 Votes

I'm looking to connect with any investors and property managers in the Midterm rental space in Connecticut. I have been a long term rental investor for 9 years with 30 units currently. I'm looking to experiment turning some vacancies that I have coming up into midterm rentals. I don't know enough about the midterm rental space, and as part of my research i would love to connect with other investors who have midterm rentals and have a conversation about your experience. Thanks in advance.

0 Votes

All Forum Posts by: Jose Bernard

Jose Bernard has started 11 posts and replied 35 times.

Post: A lesson from a perceived business failure

Post: New Fannie Mae cash-out Refinance seasoning Requirement.

Post: New Fannie Mae cash-out Refinance seasoning Requirement.

Post: New Fannie Mae cash-out Refinance seasoning Requirement.

Post: New Fannie Mae cash-out Refinance seasoning Requirement.

Post: New Fannie Mae cash-out Refinance seasoning Requirement.

Post: New Fannie Mae cash-out Refinance seasoning Requirement.

Post: Connecticut Midterm Rental Investors??

Post: Connecticut Midterm Rental Investors??

Post: Connecticut Midterm Rental Investors??