All Forum Posts by: Ko Kashiwagi

Hi Brittane,

Most rental programs will cap at 80% LTV, but with hard money usually it can go up to 90% of purchase price. If you want even less than that you'd need to use private money, partnerships, creative financing (owner financing, subject to, etc) for the most part

Umbrella policy should suffice in most cases like this. However, if you plan to refinance down the line, you can form a LLC and refinance into the LLC.

Great to see other younger people in this space. Evidence builds confidence! If you keep on taking action and learning from it, there's not way but up.

Hi Ian,

You'd probably looking at "light-doc" financing that are currently at 8's to 9's on average at the moment. Some lenders will base off the "mix" of commercial vs residential by sqft and some will base off of rent, and some will base off of the unit counts, so you'd want to take advantage of the lender/broker that can fit your scenario in the most favorable way possible.

Is the property fully occupied?

Hi Kris,

Unless the sellers are really cooperative, it honestly sounds easier to just do a normal offer and flip/BRRRR using cash or hard money. Not too much room to do creative financing at those rates and arrears from at least my creative scope.

Hi Juliet,

If you have a US primary address and good US FICO, you should be able to get full LTV (80%) with rates on-par with US citizens with the right lender/broker. If you do not have US FICO, then the best I see on the market is usually 75% LTV with slightly higher rates.

Hi Saurabh,

It's probably easier to calculate this as a new deal based on 20% down. If it's a good/great deal based on that math, then you can say it's worth buying. Once you know it's worth buying then you can decide how you will finance it, whether with a 20% down out of pocket or using the cash out refinance proceeds. Assuming your investment projections is 5+ years, it's usually worth it to sacrifice a bit of cash flow to prioritize growth in my personal opinion.

Hi Maurizio,

If you are set on starting with a BRRRR, the next step would be to select the market. I would start backwards from your purchase price and financing to narrow it down, go with a landlord friendly state and try to leverage anyone you know (family member out of state, friend doing BRRRRs out of state, etc) - that should narrow done your market quite a bit.

Hi Zachary,

The constraint you are talking about may be due to seasoning requirements that some lenders/programs have. For example, if you talked to a lender that only does conventional financing (Fannie/Freddie), they have 12 months seasoning period. Meaning you need to wait 12 months from date of purchase to use the newly appraised value and base off the LTV.

In comparison, DSCR loans typically have shorter seasoning, often being 6, 3, some even 0 months seasoning. For example, with the numbers you mentioned and at 3 months seasoning, you can get 75% of 250k which would allow you to get all of the purchase and renovation costs after the refinance.

If you are looking to get the purchase and renovation costs back within 12 months, you would want to look for a lender/broker that can achieve this with short seasoning period.

Hi Richard,

Since you're paying off the HELOC on the primary, wouldn't you be able to use that HELOC on your primary for the next deal?

You could get the DSCR on first and if your bank allows it do a second position HELOC on the investment property (this would be pretty rare if a bank allows this) but putting DSCR on second would not be ideal. Second position DSCR does exist but rates are even worse than HELOANs, I'd expect 11-13% right now.

Getting a simple cash out refinance sounds like the simplest option, but if you can just get a large first position HELOC only that would be a pretty convenience deal.