All Forum Posts by: Kevin Woodard

I concur with your overall thought process.

The end state, in my opinion and what you’re providing, is better because you aren’t putting constraints (e.g. I want a ‘fill in the blank’ loan) on how we fund the deal. In reality you want to acquire the property for as little money into the deal as possible, with whatever product will get you that end state. 

As far as where to look, there are a lot of lenders that lend nationwide!

There are products that allow for 80% LTV if there was a construction component!

@Bernard Davis In terms of timeline, what are you looking for? I would expect your average DSCR loan to close in 30 days.

@Alex Grullon I'll ask some folks and see what the ramifications are and at what point action can be taken. Just want to confirm that's May 26 / 27 correct? I would expect a reimbursement to take on the slow end of things 5 business days, but excusing it as someone else's problem is a bit uncouth. 

@Christian Walker Alternatively, you could use hard money/private money to increase the volume/velocity of flips and if you keep handful of them on your books via refinance that'll will take most, if not all, of your initial investment out of the deal. 

For this to be true, numbers have to be right and this depends on a high enough ARV compared to the project cost.

You mentioned not exploiting some tax advantages you had, what does a CPA cost to the bottom-line compared to the alternative (missing out on deductions)?

@Aaron White There are a lot of lenders out there that can lend on these types of scenarios. 1-4 units are in your single family home and 5+ is when you get into the multi-family with regard to distinction for loans. 

@Sarkis Gezalyan Lots of good info posted. Different lenders will lend on different caps. Some to total loan cost, which can include various costs. How they vet you as the borrower will vary. But generally if you can get your loan under 70-75% loan to the ARV you'll walk away will most, if not all your initial capital, when it's time to refinance.

Are you looking to pull equity from the existing property to use on a subsequent purchase? This isn’t a primary residence, correct?

I would ask more questions to build a case for why this is a good investment for someone else, then find that someone else and partner with them.

These are some pertinent questions you'll want to have answered so your partner knows you know the strategy and only need capital to execute. How much work does that property need? How much is it renting for as is? How much will it rent for afterwards? How will you accomplish that? How much is the after repair value (ARV)? Along with the down payment, you'll need funds to close and cash reserves. General short term (will you repair now and how e.g. logistics, funding, etc) and long term strategy (I'm assuming you want to keep it and continue to rent it out) come to mind. Lastly, you are bringing a deal all suit cased but how will you bring value to your partner if not cash (management, connections, essentially a hands off deal for them).

Hope this is a helpful start!

What timeline are you looking at? I would expect a DSCR to close in 30 days. If that's not soon enough, like @Issac San Miguel mentioned temporary financing will have to come into play. Why is it under market value, does it have a construction aspect to it?