All Forum Posts by: Mark Munson

Hi @Tom Thomson

I would use the Find a Lender tab here on BP. There are plenty of lenders that will do blanket loans and at 75-80% LTV. Just make sure they have a partial release clause if you want to sell one in the future. Also, ask the lender what the payoff amount would be if you sell one, usually it is 110-120% of the prorated portion of the loan. Feel free to connect if you need any advice.

Hi @Ron Strickland

Welcome to BP! 

 You are not going to be able to avoid origination fees and an underwriting fee. Usually the latter is around $1499-$1999, lower for experienced investors. 2% origination fee is reasonable as well, especially if you have no experience.  

They'll work with every broker, typically. As long as you provide what they require for on-boardng. I would not worry about if you are right for them, I would worry about whether they are right for you and your client. If something goes wrong, you'll wear the black eye, not the lender. 

Hi @Rebecca B.

To echo what others have said above, use the Find a Lender tab and call around to as many as you can. You'll want to ask a few things:

1. Do you lock my interest rate and when? The right answer to this is they should lock your rate for 30 to 45 days and do so immediately upon your credit being pulled and the application submitted.

2. What is your debt service coverage ratio? You want a ratio of 1 to 1, anything higher is more restrictive and can mean you will get less money then you are after.

3. What is your maximum LTV on a cash-out refinance? Most lenders are at 75% LTV, but some go to 80%. 80% LTV will increase your rate fairly significantly.

4. Can you send me a formal term sheet? Make sure you get a formal term sheet to compare apples to apples, don't accept soft quotes.

5. What is your prepayment penalty length and structure? Aim for a 3-year penalty; and a stepdown structure is most preferred.

6. What is your closing time frame? Should be about 24 days.

7. Do you offer buy downs? Some lenders can offer buy downs and even roll that cost into the loan.

8. What are your fees? This should be outlined on the formal quote, but most will have origination points and an underwriting fee (this is also referred to as processing or service fee too).

9. Can I roll my origination fee into the loan? Some lenders offer this as well, but usually at 70% LTV and no greater.

10. How much will the appraisal cost me? Some lenders have fixed costs, but most will go through an Appraisal Management Company for bids. Some lenders also upcharge you and use this as a profit center, so avoid that if you can.

Feel free to reach out if you need any advice. Best of luck!

Hi @William Tse

I would be extremely cautious on anyone telling you they are getting DSCR rates far under 6%. Most floor rates across your largest lenders are 6.25-6.5%. To get that low you would be putting down a lot of money to buy the rate down, which generally doesn't make sense unless you don't intend to refinance for 5+ years.You should be doing both flips and buy and holds. Obviously if you can do the BRRRR method do it, but that is a lot easier said then done, especially in certain markets. You should be building an assembly line of flip then flip then buy and hold. This will allow the constant injection of capital into your company while also allowing you to buy rentals, which is the end goal. The reality is a good real estate investor masters a number of strategies and let's the deal dictate the best path forward.

Hi @Damein White

You can dispute the appraisal, you'll just need additional comps to do so. Every lender on BiggerPockets has probably disputed hundreds of appraisals, I know we have and usually with great success, assuming there was an error or a failure to use clear, similarly spec'd comps. If a dispute doesn't work, ask the lender to order a new one. It will likely cost you more money, but you probably won't have another alternative. If the lender refuses, use a different lender. 

Depending upon your credit and the asset location, you can get to 90% of the purchase price + 100% of the rehab costs, so long as that collective amount does not exceed 75% of the ARV. Avoid lenders that make you escrow your monthly payments at closing, that is not uncommon for new investors but far from necessary and there are many lenders that won't do that to you, regardless of your experience. Your rate will likely be between 10.5%-11.99% if you are seeking the maximum leverage. Also ask lenders if the rehab money is non-dutch. That means you do not get charged on the rehab funds until you access them. That keeps your monthly payment lower as you get the project going. Feel free to reach out if you need more advice and best of luck!

Hi @Kevin Rock

Use the Find a Lender search on BiggerPockets, then call each one and get a term sheet. If they give you a soft quote, ask for something formal on their letterhead. Then compare a handful and make your decision. Just make sure they lock your rate upon pulling your credit, if they float the rate then go elsewhere, as that opens the door for a bait and switch. You can refinance into the LLC name at closing, no need to move it prior. Lastly, it will be important to each lender as to when you bought the home. Each lender has different ownership seasoning requirements, so if you have owned it less than 3 months, your choices are limited for cash-out refinances. Feel free to connect if you need more advice and best of luck!

Hi @Mary Light

Welcome to BP and best of luck!