All Forum Posts by: Luke Terry

Following up on this post I want to backtrack partially my endorsement for Corevest as I've finalized a portfolio loan with them for a few reasons.  I'm curious if anyone's had similar experiences or additional feedback:

- You have to bring alot of money to the table for closing.  For a $700K portfolio loan I had to bring over $80K to closing, with a sizable portion of it being mandated capex, insurance, tax, and debt reserves.  That's just additional money that they get to hold on to that I had to provide so they could be protected.

- Low LTV - After being marketed that they could go up to 70% LTV I was only able to get 62% ARV due to very conservative DSCR requirements that they had in place

- Much higher origination fees then expected.  They were marketing a 1 pt for closing costs but it ended up being over 3.5 pts when all origination fees were aggregated.  They also have a $7,500 origination minimum fee so if your loan is less than $750K you're going to be paying more.  This gets to be very expensive for what turns out be only a 5 year loan

- Intrusive property management and LLC agreements. They require you to create a new LLC in Delaware, which doesn't seem to be a major deal but just adds more complexity and cost to the process. Additionally they mandate certain requirements that need to be included in your LLC's operating agreement as well as they require modifications to your property management agreements that holds the pm liable for payment if I default. This was a major issue to work through with my property managers and was a unique lending requirement for corevest

All in all Corevest seems to talk a good game, but when you get in the weeds they end up under-delivering on what they can provide (not unusual when working with lenders), and the controls they put in place to protect themselves during the loan or unusual and much more costly then market norms.  

For these reasons I am going to look else where for additional long term loans.  I'm interested if others have had similar experiences.

Hi Jim,

For single refinances the ones I've considered is Lending One and Fund That Flip.  Lending Home will be introducing single refinances to Ohio soon but is not available yet.  If you bundle multiple together and are able to do a portfolio loan ($500K min) I've found Corevest is a solid option.  I also like S&T Bank (they're regional to the area) for both single refinances and portfolios but I'm not sure if you'd have constraints with them if you don't live in the area.

@Tristan Colborg I can only speak for Cleveland, but I wouldn't expect to be successful challenging their tax assessment if it matches the price I purchased the home for.  In every case I'm challenging the assessment because I was able to buy the property at a substantially cheaper price.

@Surya Kumar  I submitted in March and had by hearings in August.  They said theoretically they could do hearings a year out depending on the backlog but I would think you'd at least get scheduled.  I'd recommend contacting them.

Thanks @Chris Mason.  This is the approach I've tried to take but it's been nothing but headaches.  The issue is that I'm growing fast (I bought 20 houses in 2019 and plan to increase that output in 2020).  My wife has been denied because she doesn't have income outside of this rental income and we aren't showing much rental income until our taxes come in this upcoming year.  I can pluck off a couple of loans through her this upcoming year but it's not going to meet the volume I need so I'm trying to find other options.

Hello,

Does anyone have recommendations for long term lenders after you're Fannie/Freedied out that service the Cleveland market?

I've purchased a handful of single family rentals over the last 4 months and I'd like to see how soon I can refinance from my bridge loan into long term debt.

My preferences are 30 years (20 years is okay), 75% LTV (80% ideal), min loan amount could be $50K (most of my properties have an ARV of $70K, although some are higher), preferably portfolio loans (I can bundle 5-15 properties into one loan), and requires less than 12 months of seasoning.

Corevest offers long term lending but has a $75K loan minimum which rules out most of my properties. Lending Home is also soon entering the Ohio market with long term lending options (if they haven't already) but have similar min loan requirements.

S&T Bank offers portfolio loans but require 12 months seasoning. I plan to work with them in the future but want to see what other options might work.

Thanks for any recommendations.

Hello,

Does anyone have recommendations for long term lenders after you're Fannie/Freedied out?

I've purchased a handful of single family rentals over the last 4 months and I'd like to see how soon I can refinance from my bridge loan into long term debt.

My preferences are 30 years (20 years is okay), 75% LTV (80% ideal), min loan amount could be $50K (most of my properties have an ARV of $70K, although some are higher), preferably portfolio loans (I can bundle 5-15 properties into one loan), and requires less than 12 months of seasoning.

Corevest offers long term lending but has a $75K loan minimum which rules out most of my properties.  Lending Home is also soon entering the Ohio market with long term lending options (if they haven't already) but have similar min loan requirements.  

S&T Bank offers portfolio loans but require 12 months seasoning.  I plan to work with them in the future but want to see what other options might work.

Thanks for any recommendations.

Hey everyone,

If you're able to purchase properties well below the appraised tax level, I highly recommend appealing to the county to have your property taxes lowered.  It doesn't require much effort although it's a slow moving process.

Here's what I did:

Between January and April of each year, I'd check to see to what the tax value of any homes I purchased from the prior year on the county website (here's the link for Cuyahoga county): https://myplace.cuyahogacounty.us/

If I was able to buy a house from the prior year for a meaningful amount less I'd submit an appeal to lower the property taxes.  A ballpark way to estimate this is if the county values the property at $100K and you purchased it for $50K and your tax bill is $2K for the year, if you successfully challenge it will decrease the tax bill by $1K (50%)  

Here's the link to the Cuyahoga County board of revision to submit change requests: 

https://bor.cuyahogacounty.us/en-US/complaints-search.aspx

Sometime in the following months you get an appointment to appear at the office.  Your purchase contract is the most relevant documentation to prove the real value of the home.  I presented that during the hearing and it was a very straightforward process.  My hearings were in August after submitting the revision request in March.

I even did these appeals for flips that I no longer owned.  I just had to notify them that I'd like the check mailed to me as opposed to the current home owner.  This was especially helpful in high tax cities like Shaker Heights and Cleveland Heights.

The county does an appraisal every few years so even though my rentals will have their values readjusted in the next 3 years, at least in the interim I've been able to save a few hundred dollars a year per property through reduced property taxes.

Hopefully this is helpful and am interested in hearing any other tips others might have.