All Forum Posts by: Justin Li

One "hack" if you use a cc for expenses pay it before the statement posts. 

That's a great question! I don't know, but I would think a CU local to the property would support an investor's investment in the community. I would suggest that you contact EVERY local bank and credit union in the area. Keep us posted!

ideally every property should help your debt to income ratio not hurt it which ultimately helps credit.

Eastman Credit Union (based in TN, but branch in TX) has financed/refinanced 5 of our properties so far as commercial loans (DTSR). The rent is required to be 120% of PITI. We do not have an LLC, and our recent credit scores are 810/814. Current refi terms are: 25 year amortization, 6.00 interest rate on 10/5 ARM. I recommend local credit unions!

@Justin Li

By the way, congrats on your 5th property! Most people out there don’t even do their first!

Getting your credit pulled upon inquiry is going to hit your score regardless. And I don’t know any institutional lender who doesn’t pull your credit when you apply for a loan.

However, it's getting them financed under your personal name is what kills you. And regardless of your DTI, the credit bureaus don't give a hoot about you income, only about the nature of your debt. And subsequently, your score will drop as you start to look riskier and riskier. Remember, most people don't own rental property and the credit reporting companies has a one size fits all model for analyzing a borrowers risk!

Community and regional banks will lend to your LLC and keep the debt off your balance sheet.

What I’ve done in the past is I would accumulate 5 properties with a hard money lender and then refinance them with a community bank.

Hope this helps, feel free to reach out have any other questions!

 Hey Justin, 

I would recommend working with a mortgage broker to prevent multiple inquiries and a bunch of paperwork all over the place. 

A broker only does 1 credit pull and it is good for 90 days. They also collect the necessary documents to satisfy underwriting requirements for most lenders. 

A great broker will prescreen your deal, and no exactly where to take it to successfully close. 

Zero to worry about assume you make your payments on time of course. It will be temporary. Certainly not worth paying a premium for a loan you do not have to by doing a DSCR loan when you do not need one.

Necessary evil. .... keep control of your DTI ... that's one of the strongest things you can do. And obviously automate all bill payments etc.

A great option for you is a DSCR loan. If you borrow through an LLC and utilize a DSCR loan, your credit won't take a hit. A switch to a DSCR loan through an LLC in lieu of conventional financing is a switch often made by investors once they get to property #5 or so.