All Forum Posts by: Kyle McCann

If you are going to deed your personal residence over to an LLC you can use a DSCR based loan where underwriting will care far less about personal credit and not at all about DITI.

@Scott M. Thanks for the reply Scott.  I agree that I should wait to see what the real numbers are, but even at 80% of projected cashflow, I'm thrilled.  My real struggle is letting a half million dollars waste away in the bank for a year when I could be putting those little green men back to work.  There is an opportunity cost to being conservative.  

Hello,

I'm in the process of completing renovation on 24 units that are being converted from multifamily to condos in a Jersey Shore community. The game plan is to AirBNB the condos seasonally. After refinancing, I'll have an annual PITI payment of roughly $490,000 across all of the units. AirDNA estimates my annual revenue at roughly $1,040,00. This leaves me with over $500k of unadjusted cash-flow. The cash-out refinance should leave me with about $900k in proceeds. $400k of that will go to pay off investors. My ask for advice is what to do with the remaining $500k in cash out. I typically like to keep at least 6 months PITI reserves for regular long term rentals. Should I be putting more away for STR since it is a more volatile seasonal rental? In theory, I will have enough cash to reserve a whole year. Is that necessary or can I afford to pay myself here?

Your input is appreciated.

Hello,

I'm in the process of completing renovation on 24 units that are being converted from multifamily to condos in a Jersey Shore community. The game plan is to AirBNB the condos seasonally. After refinancing, I'll have an annual PITI payment of roughly $490,000 across all of the units. AirDNA estimates my annual revenue at roughly $1,040,00. This leaves me with over $500k of unadjusted cash-flow. The cash-out refinance should leave me with about $900k in proceeds. $400k of that will go to pay off investors. My ask for advice is what to do with the remaining $500k in cash out. I typically like to keep at least 6 months PITI reserves for regular long term rentals. Should I be putting more away for STR since it is a more volatile seasonal rental? In theory, I will have enough cash to reserve a whole year. Is that necessary or can I afford to pay myself here?

Your input is appreciated.

4-5% is typical for the "hard money" space right now.  Those loans are based of of Debt Service Coverage Ratios and less so on borrower credentials.  I've several of my properties locked up in 30 year amortized loans of that variety right now.  They make a lot of sense for me because my debt to income ratios don't qualify for conforming loans. 

@Nick Louie

Nick, 

If you can have him deliver vacant, that would be incredible.  Yes your holding costs are higher month one, but rentals are at a premium right now.  You should have no issue filling it with tenants of your choosing.

Nick,

Congratulations on becoming a landlord!  NJ is a very tenant friendly state and eviction is no easy task.  Even if your tenants are month to month you will not be able to just remove them.  If they are paying there is no cause for eviction.  Your best bet would be to provide them with new leases with market rents.  Hopefully, they are cooperative and sign.  If they don't the original lease will stay in effect.  Month to month is essentially indefinite in NJ.  If they are non-paying you can file for eviction, but that can be a substantial timeframe.  Each county court is handling eviction differently.  I would check with investors in your properties county to see if the docket is moving at all.  Here in Camden County, the court is so back logged we are seeing months in delays.  God-speed sir.

Hi Mike,

I live in Collingswood, right between Pennsauken and GC and just finished a flip in GC.  Inbox me if you want to discuss your potential deals.

Thanks.

Welcome to the party Justin.  South Jersey offers a lot of networking opportunities.  I would recommend joining SJREIA and SJREIG.  Both of these groups offer regular meetups.  I've met a lot of great people through these groups who have helped further my real estate business.  Good luck out there and let me know if you need any assistance.  Cheers!

Welcome to BP Cassandra!  You aren't going to find a better place online to network with real estate investors.  Where in NJ are you located?  I'm a South Jersey investor, agent and lender.