All Forum Posts by: George Despotopoulos

Hey @Harry Arnold -- doing a rate/term refinance at or below 70% LTV should be do-able. It depends on your credit score, the property value/loan amount, and the property's income (what's known as the debt-service coverage ratio (DSCR)). For a 30 yr fixed, youre likely looking @ 6.25% - 7%

@Joshua Esplugas where you go for financing depends a bit on what you're investing in, what type of strategy you're employing, and what your income, credit, background, and liquidity look like. Banks will be by far the cheapest option but the most difficult to work with. Then there are non-qm lenders. Their terms may not be as good as a banks but they are also pretty competitive, they will look at your income/DTI/credit, etc. similar to what a bank would do but their requirements are less stringent.

After that, there are non-bank direct lenders that offer 30 yr fix rates based on the property's income, not your personal income. A non-bank investment property lender will not look @ your income, DTI, net worth, etc. It's more of an asset-based loan. This will be the most expensive option in terms of rate and fees but it will be the quickest/easiest process to go through.

@Ian Whiteman just to add to what Timothy said, private money lenders/hard money lenders will require 20%+. Pre-covid you may have found a hard money lender willing to do 10% - 15% down if they were also funding the reno but now that's pretty rare. Also, the rates for a product like that will be 9.5% - 11%. It's also a 12-18 month term.

15-30 yr term loans will definitely require at a minimum 25% down at that price point.  

Private lenders differ. Most will ask about the deal (prop address, purchase price, rehab budget (if any), ARV (if there's rehab or you're buying below market), they'll want to plans/a scope of work. Also, have a decent idea of where your credit score is at and what your credit history looks like. Some may want to get bank statements to verify your liquidity. Otherwise, having comps for as-is and ARV for flip deals or as-is and rental comps for rental deals will be helpful.

That definitely sounds like something that you could get a ground-up construction loan for. 

Also, check out https://www.gethearth.com/ -- they provide funding for rehab projects. 
  

@Jeff Cliff -- where's the property located, when did you purchase it, and what's the property's current value? 

Usually a deal of this size you either go with a local private lender, do it all cash, or don't do it. It's too small for nationwide hard money lenders to provide financing on. Using unsecured debt / personal loans may carry very high interest rates that kills the roi/profitability here.

Hey @Manny Del Val - no experience with them, so just my thoughts, it seems that those terms are a marketing tactic more than anything.  90%  & 100% on fix and flip is rather rate to say the least right now...even 85% and 100% is pretty tough to get. 

If they are lending at those leverage ratios, I could see 85-90% / 100% being available only to repeat borrowers and very experienced flippers (10+ deals in the last 3 years) that also have a 680+ FICO and strong liquid reserves (20% of the deal). Outside of that, I don't expect many to qualify for anything but 75% - 80%. 

As far as 30 yr fixed at 75% and 5.99% -- 75% on purchase or rate/term refinances is do-able at the moment but I would expect rates to be more so in 6.5% - 7.875% range for that product.

@Simran Ludher - no problem, let me know if you need anything else. Happy to help.