All Forum Posts by: George Despotopoulos

@Christopher Bowling you can get a 70-75% LTV against the portfolio to the LLC -- the LLC will be the borrower on the loan but the members/owners of the LLC will give personal guarantees on/for the loan. That would mean the owners/members would need to have their credit check. You can get a 30 year fixed loan @ 4.375% - 4.875% depending on property values, market, DSCR, and your credit score.

@Ron Lamb where are the properties located, how long have you owned them, and what's the value of each? 

Traditional sources of financing might be a good fit. You can also explore a DSCR/investor loan on a 30 yr fixed. Depends on the answers to the above.

@Brian Davis where are you looking to invest -- what city/state?  And, what's your credit score? With a bit more info perhaps we can help. You should be able to get a 30 year fixed (no balloon, fully amortized) in the 4.75% - 5.250%. 

@Alfred Litton Cash-out refinances w/ non-bank lenders are very competitive right now. You can get a 30 yr fixed on a 1-10 unit residential investment property w/ a rate in the 4% - low 5% range. 

Like others mentioned, you can work w/ commercial or non-bank lenders for a loan even if someone else is supplying the downpayment capital, but the best way to make this happen is by investing through an entity, like an LLC. The capital providers will need to be OK w/ giving a personal guaranty @ closing (and having their credit pulled during underwriting). If that's acceptable, then doing an LLC with a robust operating agreement laying out the material terms of the partnership will be a good way to go about it -- an experienced corporate/RE attorney should be able to draft this for you.

Hey @Shaun Palmer I believe if you're refinance and deed the properties to LLCs, you may be able to continue w/ fannie/freddie loans. Regardless, like others have said, DSCR loans are rather competitive right now. Non-bank lenders can be @ 4.25% - 4.875% for a 30 yr fixed at max leverage against a portfolio. It depends on the property's cash-flow and your credit mostly. The property's DSCR (cash-flow/income) also play a role as do the loan amount/property value. Process w/ DSCR lenders (aka non-bank lenders, investment property lenders) is much quicker than w/ banks and the requirements are much less stringent. Process typically takes 21-30 days to close.

Like others have said, some hard money lenders do both short and long term loans. And, some will give you discounts on the refi for using them twice on the same property. That's definitely something to ask about. 

For #2, if you exhaust your traditional number of loans, you can just use a hard money lender or a non-qm lender. Hard money will be easier/quicker and non-qm will have slightly better terms but much longer process. 

@Leon Lee -- do you have a closing cost estimate or something breaking down all the fees? That comes out to roughly 3.75% of the loan amount. If that's an accurate figure for total closing costs (and it includes any escrow funding required, title/recording, origination fee, processing/underwriting fees, etc) then it does not seem unusually high to me, but please keep in mind that my experience is in the asset-based lending space-- so my opinion is skewed. Typically in our space closing costs are around 3.25% - 4.5% when you factor in origination fee, escrows & title/recording fees. 

@Ryan Keenan it's always been slightly difficult to get a HELOC against a rental property and even more so now -- not saying it's impossible, just tough.

Have you considered doing a 30 year fixed rate cash-out? You can go up to 75% of appraised value but do not need to if you'd like to take less. 

@Leon Lee if you're looking @ getting $400k at 3.5% - 3.7% rate on investment properties, then yes, definitely worth it. You'll have closing costs of course & increased debt but you'll have capital at a low interest rate to redeploy when opportunities arise. The process w/ conventional can be grueling but if you're in the mid-high 3s then it's worth it.