All Forum Posts by: Katherine Blazer

It sounds like you would need to do a rate and term refinance depending on how much equity you have in the property. Which would be paying off the seller's financing mortgage. Most banks are not going to take the second position to the seller's financing loan. Even if you do want to pull equity out and you have owned it for 6 months, they are still going to want to pay off that loan.

1 Vote

2 Votes

Charlotte, North Carolina

Quote from @Molly Francis:

Hi All!

I recently started my position as a licensed agent at NetWorth Realty. I'm doing my best to get some investors here in our office (I'm at the Woodlands location) for me to pitch our company and explain our streamline process so I can build a pool of investors to work closely with.

I've tried reaching out to a few investors here on BP and no one seems to be interested in meeting with me. I understand there is a certain stigma for "wholesalers" which technically, we are, but we provide many many more benefits that people don't seem to be willing to listen to. They see wholesaler and think they're getting ripped off - WHICH IS NOT TRUE! I truly believe we provide unique and amazing opportunity for our investors.

Does anyone have any tips as far as how to get investors to get interested in hearing a pitch about our company? We provide lots of value and I want to portray that, but I can see how some investors may see this opportunity as too good to be true. Any help or advice appreciated.

Hi Molly, Congratulations! I started with Networth when I got into real estate, and I can tell you they have some of the best training for wholesaling and reviewing deals. In regards to meeting your meetings, try stopping in active rehabs, the investors I built strong relationships with were people I met organically. When it comes down to meeting investors online. It's just a numbers game, post a lot. Not just about let's do a meeting but answering questions and responding with opinions or suggestions. That works on Facebook, Instagram, and TikTok also. Find a way of marketing yourself and set 15-20 minutes every day to do it every day. Mine was posting and reviewing when I had my coffee in the morning and then again at night when I was watching TV. I also called all cash transactions in my area... might be harder now because of how many traditional purchases are happening cash now. Maybe 2pins.

6 Votes

Houston, Texas

There are a lot of pros and cons to both, and both serve a great role in building a portfolio.

DSCR can be closed in an LLC; they do not care about your DTI. Cons: they usually have a little higher interest rates and typically have points attached to them. Rates are also based on the DSCR ratio, so make sure you know all expenses ahead of time.

Conventional Investment Loans usually have a little lower rates and are without points. They have to be closed in your personal name and care about your DTI. These only use 75% of expected income to offset your DTI.

6 Votes

Quote from @Jake Brown:

Hello, I am buying a 6 unit property. I recently received an LOI from a bank for a commercial loan which states that I have to have a global cash flow ratio of 1.25x and a subject property or borrowing entity cash flow ratio of 1.15x.

I am not worried about the global cash flow ratio as we make more than enough W2 income. However, I have a few questions about the 1.15x ratio:

1) What happens if I fall below this ratio? Will the bank recall the entire loan? Does this impact my credit score?

2) Do they even check the ratio if I can make the monthly payments? Our global cash flow will be close 3-4x of the debt service.

3) How do they track and verify expenses? And income? Can I just increase the borrowing entity cash flow by paying expenses directly or signing a lease with myself?

4) Does CapEx affect the 1.15x? For context, I think upon stabilization and rent increases my property ratio will be 1.2x. However, in year 1, it may be lower as we have to turn the units.

I have done several residential multifamily loans, but this is my first commercial multifamily loan so really appreciate your help. If anything else I should know about the risks I am taking, that'd be great.

The best way to think about the ratio is how much over your expenses does the property earn. So you are making 15% over your expenses, which is great! However, if it needs a roof or something happens, the property can support itself in the bank's eyes. You may have enough, but if they foreclose will it. Not saying that you would.. but that is their perspective.

You can increase your ratio, by lowering your expenses. Maybe a different property management company, or lowering your ltv to lower your monthly payments. When we calculate the dscr, we pull tax records, review your property management form, and review your insurance quote and any HOA fees attached; in addition to what the loan will cost you monthly. Income would come from leases and a 1007 appraisal that is ordered with the value appraisal.

0 Votes

Quote from @Alyssa McEwan:

This might be a silly question but I am not really finding a clear answer anywhere. Can a hard money lender loan in another state? For example, can I be in Salt Lake City and get funding for a Montana deal?

thanks

Yes, if they work in that state. Some lenders only work in the states they know the market in, but most will allow you to work in other states with an appraisal to confirm values.

0 Votes

Salt Lake City, Utah

Quote from @Kristi Wolfe:

I've been researching real estate investing (specifically BRRRR) for a couple of years now, but cannot gain the capital required - yet. So, I'm considering wholesaling for the next few years. But, once I get a property under contract, what if I cannot find an end-buyer? Does the contract expire? Am I on the hook for buying the property myself? How do I even find a buyer? (Just by networking?)

Thanks!

If you are putting properties under contract at the correct price, moving the deal should not be a problem, at least in the markets I work in. We have a hard time finding properties priced well. Wholesaling and finding properties is a great way to find the best deals for yourself also.

Now, your inspection time period is a number you never want to forget, that is where you can get out of the contract without losing your escrow.

You should find a local real estate attorney that works on the investment side of the business so you fully understand the contract you are using, and what local laws are.

0 Votes

Chicago, Illinois

@Joseph Stern Hey! I love seeing another Tampa Bay Investor!

For cash-out, normally 80%. It also depends on what you qualify for and what the value of the home is.

3 Votes

@Mike Schorah is it a loan closing in your personal name or in an LLC?

0 Votes

I would do the math. When you buy the 2 or 3 properties what does each cash flow? Does that equal more than the $2,000 you project with just purchasing one.

Also when you talk with your attorney what is the benefit from a liability standpoint of having a mortgage on the property. When you talk to your accountant what are the tax benefits of having a mortgage?

Consider your risk. If you only have one property and it does not rent for some reason... is there a safety net of multiple properties....

1 Vote

Tampa, Florida

All Forum Posts by: Katherine Blazer

Katherine Blazer has started 67 posts and replied 322 times.

Post: Cash out refinance after owner financing

Post: Commercial Lending Rates

Post: Realtor at NetWorth Realty

Post: DSCR Loan Vs. Conventional Loan

Post: DSCR and Loan Covenant Question

Post: Can a hard money lender loan in another state?

Post: What if I cannot find an end buyer?

Post: Primary Residence Cash Out Refi

Post: If I get denied for a cash out refi, could I ask for lower LTV?

Post: Buy Rental Property Cash Or Have Mortgage?