All Forum Posts by: Marty Johnston

 Hey Dave,
There are a TON of lenders similar to Aloha that offer DSCR-type loans. Call them Portfolio, Commercial, DSCR - they're all the same IMO. Would be happy to discuss, sending you a DM!

Welcome to Bigger Pockets, @Nancy Noether! Are you seeking a commercial/portfolio loan or a conventional mortgage route? The latter will look at your personal income, DTI, etc while a commercial/portfolio lender will look to the Debt Service Coverage Ratio (DSCR), credit, property type, and market to determine max LTV and interest rate usually (not all options are created equal).

@Shane M. the above posts are pretty accurate without forcing appreciation to create "new capital" from your investments. This is why we see so much about the BRRRR method, because it works, and eliminates the issue you're facing. Even using Gap Funding for down payment and closing costs runs you into the same issue, because while it saves you having to share any of your equity, the debt service for said funding usually eats away at most of your cashflow (same as your reference to a HELOC, on a HELOC would be a much lower payment than Gap Funding [va unsecured debt]).

In most cases, its one of 3 options:

1. Force Appreciation to get your money back out, to do it again

2. Find a killer deal where that HELOC or unsecured debt for Gap Funding still makes sense for you and your cash flow

3. Obtain equity elsewhere (family members, equity investor, etc)

Hey Greg! Sending you a DM. Are you seeking financing options for a 1-4 Unit or Commercial property?

Hey Linda! I just sent you a DM. There are a lot of options for what you're looking for!

 There are options! Sending you a DM

Hey Adriaan!

First of all, congrats on your 23-doors! Woot! There are a lot of different strategies out there to move quick, depending on your goals and appetite. There are bridge lenders out there who can close in 2 weeks on small-balance MF like what you might be seeing there in Cleveland, ranging up to 80% LTV. But when you say bridge, and you also referring to Bridge+Rehab then BRRRRing out your forced appreciation? The refinances as your pointed out, can in fact be the slow point, but 21-28 days is very feasible with the right lending partners. What might you consider "slow" for your process?

Thanks!

I have a favorite from my different rehab lending sources over the years that I use and share - send me a DM and I'll pass it along!

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $115,000
Cash invested: $16,950

First in-house BRRRR! Purchased and lived in the home for a few years, renovated while we lived there, and have approximately $100,000 of equity as of 9/8/2022 (posting). Bought a new house, converted this to a rental with solid cashflow. Obtained a HELOC before buying our now home. Used that $50,000 HELOC to invest elsewhere while maintaining our low-rate 30-yr.

What made you interested in investing in this type of deal?

Could do the renovations myself to keep cost low, and do it as we lived there. First home, little cash invested, great ROI

How did you find this deal and how did you negotiate it?

Primary residence home purchase to get started!

How did you finance this deal?

Personal funds

How did you add value to the deal?

All-new kitchen, all-new bathroom, flooring and paint throughout. Re-finished the basement, and all for cost of materials only.

What was the outcome?

Additional $100,000 in value - $50,000 HELOC netting about $50,000 in equity
Cashflow of $745 /mo with 2-yr tenants in place
$50,000 HELOC used to invest with Developer for anticipated 40%+ returns

Lessons learned? Challenges?

Paying contractors moving forward, DIY can show in certain aspects and tenants will demand fixes anyways - do it once the right way and don't cheap out.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Ethan Brooks Mortgage Team at Fairway Mortgage for all deals in WI, IL, and MI! >> https://www.ethanbrooks.mortgage/

@Christina Merlo everyone makes great points here, but one I would add is the ability to obtain gap funding through the form of unsecured debt, used for down payment, closing costs, rehab, (or anything really, since it's unsecured). This might be the perfect avenue for you if you don't have/want to approach friends and family.

These loans are based on personal income, credit score, DTI, etc for the amount you qualify for, since there are unsecured (meaning no collateral). These are usually on 5-7 year repayment terms, so payments can be high, meaning they're best suited for BRRRR, Flips, or Builders where they'll pay off/down the loan with proceeds when they refi or sell.

Happy to chat more on this if you like! Feel free to DM me.