All Forum Posts by: Katherine Blazer

Bank statement loans are a great option for self-employed borrowers on their primary or second homes. They take what is being deposited in your bank each month and average it as your income. We do still need to look at your taxes but they do not play the same role. 

So a DSCR loan is what you will use when you cash out. DSCR is Debt Service Coverage Ratio, or how much money will the property makeover its expenses. They used to be called cash flow loans. You can use private money, bridge loan, or flip loan to purchase the property and rehab. You will want to do the math on the front side because if you do these loans and rate and term refi into the DSCR there is no season. However, if your math is off, you do not finance the rehab or a couple of other items, and you will need to wait around 6 months to pull the equity out. You will also want to make sure you can justify what your rental income will be and that it will cover all expenses on the property.

I would start local. So a local bank or wholesale broker. They will all need the same information and shop around to get the best rates! It doesnt hurt you to do so. 

I love them! They are a great way to scale your business.

They are asset-based loans as opposed to borrower based. So pending that the investor has decent credit and reserves to support, they do not care what your taxes look like. It is all about will the property support itself... isn't that what all investors are looking for anyway? You will pay upfront points for the "risk" the banks take for not digging into the borrower's ability to pay. You can find interest rates similar to where conventional investment loans are. You are closing these loans in an LLC or other entity. If you are working with the right team they close a lot more quickly than traditional loans.

I would work with one, but I might be a little biased... My only suggestion would be to make sure they work with investors. A traditional mortgage broker only knows FHA, VA, and Conventional loans. While conventional loans have an investment option with 20% down, it does not always work because of DTI. Conventional loans also have to be closed in your personal name. There are a lot of non-qm options with DSCR loans and funds that offer asset-based loans.

I do not know of any. Do you have the equity can could do a cash-out? 

@Ryan Blankenship What area is he looking in?

I would look at prepayment penalties for both. 

Unfortunately, when you work in the non-QM world they just change the rates. My experience has been that long-term rentals normally get slightly better rates. That being said we aren't seeing interest rates in the 4s like we did in January and they are most likely going to continue to go up. But when they come back down you can refinance. 

I love talking Real Estate, Larry! What ideas do you have? 

 It can all be done at once. They usually want to see six months of ownership before they will allow you to pull equity out.