All Forum Posts by: Kevin Woodard

If you were to look at it from a mathematical standpoint then yes: higher ROI is better for the investor. However, investors are human and we are subject to emotions. So do what you're comfortable with and have fun with it!

There’s a lot of good information in this post so without beating a dead horse. If you’re intent is to rehab the property you’ll want a loan that can fund a portion of acquisition (anticipate 75-85%) and 100% of rehab. 

After the rehab you can use a DSCR that will not factor income, if you want to go for a traditional BRRRR.

As far as partnerships go, I wouldn’t rely on a partner for income since you can go with a loan that doesn’t factor income for underwriting. It would be more of a factor for cash reserves and maybe credit. 

Good luck on the deal and hope this helps!

On BiggerPockets specifically there is the networking tab that you can leverage to find lenders. If you are looking for individuals that lend their money take a look at Lend2Live. Hope this helps you save some money and close some deals!

Good stuff glad to be of assistance 🤙🏽

Do they have a page here on BP or any other real estate investor oriented blog/page, think Facebook. Are they registered with American Association of Private Lenders? I would also shop around and see if they are in the ballpark of other hard money / private lenders. 

Hope this helps. 

@Michael Bieler If that’s how they like to mitigate risk, it’s well within their right. It’s also within your right to shop around, which you are doing. Like @Issac San Miguel stated, that's more of the norm I have seen. With capital tightening, due to current economic trends, I would expect 15-25% down depending on the complexity of the deal (e.g. simple SFH - 8+ unit MF deal).

@Luis Sosa 80% LTV exists, however if you need to go 80% then you will most likely be leaving money in the deal. This much leverage is also significantly more expensive.

Yes they are amortized over 30 years. 

Just ask yourself this, ‘if the roles were reversed would I lend X, resulting in Y LTV, for this particular property?'

It all comes down to mitigating risk, since you can never eliminate it. Checking the cash, the asset, the experience, and the financial character boxes is just a way to assess the risk, and determine you will likely not default. 

Depending on the loan, if you add value you can cash out without a seasoning period. I am specifically referring to a 30 year DSCR product, and you should expect 75% LTV. That would give you a loan amount of about $195,000 (260k valuation), which goes to pay back your HML. Anything remaining goes to you in which case you can calculate how much money you're leaving in the deal. You'd still be left with a cash flowing property year 1 at the lowest forecasted rent, not factoring for vacancy.

Hope this helps. 

If your goal is to rehab a property, increase value, pull a substantial amount of your capital out, then rent it. You’ll want to break up financing in two parts as previously mentioned. 

There are financing options that have 30 year terms and include rehab in the financing. However that is the exception and not the rule. The down side to this is pulling equity out post-construction, but it works in certain occasions.