All Forum Posts by: Michael Nelson

80/20 might be tough, but I think you can definitely achieve 75%. Worst case you can have your loan be "Partial Interest Only" which means the first 10 yrs of the loan are interest only, and the following 20 are fully amortizing. The lender should be able to go off the interest only payments for their DSCR calculation, and what this allows for is a higher DSCR, and as a result, higher/more allowed LTV. Hope this helps/makes sense!

Interesting thought! Thats why I love these forums. You get all different outlooks. Definitely something to think about. Im in the scaling phase so getting as much money out of each deal to add another is most important to me. I live in an area where rent appreciate quite a bit so it will always make money long term.

Thank you

0 Votes

Hartford, Connecticut

Quote from @Taylor Dasch:

You either have to leave money in the deal, find a lender who will do a higher LTV, or flip and cash out. But you didnt have too much room on this one in the first place. What was your initial plan? Even if they do 85/15 your going to have to leave money in it.

My initial plan was tat it would appraise higher. Im working on getting another appraiser over there in hopes i can get mid to high 6's

0 Votes

Hartford, Connecticut

Hi Everyone,

I currently have a couple rental units and i am looking to do another Brrrr. My issue is properties have appreciated a lot since the last one. I only have enough cash for probably 10% down on anything id want to do. Im looking to brrrr another multifamily and refinace with a DSCR.

My question is what are my options for 10% down initial purchase with rehab able to be built in.

0 Votes

Hi everyone, heres my BRRRR situation

purchase price 520,000

rehab 25,000

Appraised at 600,000

Rents are now at 1950, 1850 and 1600 totaling 5400

My question is can i get a DSCR to take out all 545,000 as the rent roll to to a mortgage for that amount would ratio out to around 1.4 but....obviously appraisal is not high enough for 80/20

Any info on this or suggestions would be great. Trying to get as much as possible back out

1 Vote

Hartford, Connecticut

@Mat O'Grady Great point. Thank you

My area of work is Between East lyme, CT and Westerly, RI currently

Previous deals

LTR in mystic, CT purchase price 240k budget 20k ARV 330K (currently 430K 4.5 years later)This property rents for 1900 per unit nothing included

STR West Dover, VT purchase price 367k ARV 410K (This deal was only cosmetic remodel 8k and 7k to stage it. goal was cash flow not refinance money out any time soon) grossed 45k first year in service projected to do 60k this year.

0 Votes

Here’s my elevator pitch!

My name is Michael, I'm 32 years old. I live and work in Connecticut. I have a LTR duplex that I rehabbed and have been renting for 5.5 years and I have a STR That I purchased 1.5 years ago and rehabbed as well. Both were purchased the conventional way.

I manage both rentals myself, along with 7 other LTR in the surrounding area.

Im looking to scale and go full time into real estate, so saving up for each deal wont work anymore. I have relationships with a few hard money lenders, investor friendly agents, wholesalers and contractors in the area.

I'm looking for a private money lender to help with down payment for the hard money loans. I'm finding 10-20% down on hard money. I plan to use the Brrrr method to pull all funds back out. These projects will all be 2-4 unit small multi family to start. For the projects I'm looking at, I will be aiming for a 3-6 month turn time.

I'd like to find someone willing to do one deal and if the relationship works well, scale up to multiple deals per year. The relationship is the most important to me.

2 Votes

@Michael Shea I will definitely be in contact with you soon.

0 Votes

New Haven, Connecticut

Quote from @John Otradovec:

I am 20yr lender and HML as well as Investor. If the deal makes sense, we can get it done in as little as 7-10 days. With experience you can put as little as 10% down and sometimes less.

Thanks for sending the request over and for the info. I always like working with folks who also invest. Building a list of HML right now and getting my teams lined up. Ive saved your contact and will reach out soon.

0 Votes

I am looking to build a list of hard money lenders

- Im located in Connecticut

- This will be for Brrrr properties in Connecticut looking for 12 month lending looking to build a relationship and start with one and if things go smoothly do many deals from there.

- Insight on the area: homes even off market are on the expensive side but rents are high as well so the numbers work for everyone.

- I currently own and operate a LTR duplex and a STR. I manage a handful of other properties in my area as well.

- both properties I own were heavy cosmetic renovation and minor structural but I used conventional financing and didnt refinance as they are at very low interest rates (so i dont have many "exits" in the last 36 months)

I have 5 year LLC and almost 2 year LLC both with open lines of credit

personal credit score around 770

If you need any more info please let me know

Thank you

5 Votes

Quote from @Kevin Romines:

Hard money offerings are generally in a range of terms. My flippers, require different things depending on the deal.

The lenders offer between 75% to 100% acquisition and almost always 100% rehab. The fees range from 2-3 points with some type of admin fee in the $1000 - $3000 range. The interest rates range from 9.75% to 12.5% depending on experience and down payment. There are lenders that require a full appraisal through an AMC and others that will determine value themselves, so closing turn time ranges from 7-21 days. Some lenders charge interest on the full amount of the loan, but most only charge interest on the amount drawn.

Most terms are 12-24 months on the loans. You can typically get extensions of 3-6 months for around 1 point, but there are some differences there lender to lender. ARV ranges from 65% to 75% depending on the program. Docs required are dependent on the LTV in most cases, as the LTV goes higher, the more docs they want, such as income, bank statements, and credit. Reserves range from No Reserves, to 3-6 months. Minimum loan amounts range from $50,000 on up to $100,000 in most cases.

Heavy rehabs or rehabs that are bigger than the purchase cost range from not allowed to case by case to no issues, so all over the board on that issue. Minimum credit score ranges from no credit needed to 620 to 660 depending. Lenders that work with wholesalers, meaning they will allow their assignment fee or do a double close, most allow it, but some don't? Lenders are all over the board regarding what LLC members must sign on the loan. Most lenders allow the buyers to do their own rehab work, but some don't depending on the buyers experience level.

I know I just laid out a lot of details there, but my flippers need to know all these things, so I keep a spreadsheet of who is doing what, so I can place the loan with the correct lender depending on details needed with my flippers.

I hope this helps?

Kevin thank you for the detailed response. This was very helpful Im lower on experience but higher in every other category. I understand you have to pay the piper the first few deals to get the better rates. That makes sense.

0 Votes

All Forum Posts by: Michael Nelson

Michael Nelson has started 13 posts and replied 49 times.

Post: Hard money loan repayment ? for brrrr deal DSC question

Post: Hard money loan repayment ? for brrrr deal DSC question

Post: 10% down initial brrrr purchase options

Post: Hard money loan repayment ? for brrrr deal DSC question

Post: private money lenders/partners wanted

Post: private money lenders/partners wanted

Post: Introduction . looking to make my first connections

Post: What do Hard money and private lenders need to see

Post: hard money lenders wanted

Post: What do hard money lenders need to see in terms of the deal?