All Forum Posts by: George Despotopoulos

@Cory Cannon you should be able to get 30 yr. The value that will be used is purchase price + actual documented cost -- so expect 80% of that. 

@Cory Cannon -- if you do a 30 year delayed financing, you're capped @ purchase price + documented/actual costs spent in renovating  -- so let's assume that's $103k here. That may work out fine, but you may be doing yourself a slight disservice because i) you're looking @ an $82,400 loan amount ii) a good amount of hard money/non-bank lenders look for $100k loan amount or more and iii) rates are typically higher for loans under $100k. 

The alternative is, do a delayed financing for the purchase & rehab costs through a bridge loan (short-term, interest only, no prepayment penalty) and depending on your credit score & experience, you'll get 80% - 90% of purchase price at closing and then the full $23k once you're done with the reno. That will get you a total loan mount of at least $87k, again if you have some experience, that could go up to $95,000. You'll be able to use these funds to go after other deals. Once you hit the 3 month mark of ownership, now that you have debt, you can do a 75% LTV cash-out refinance or up to 80% LTV rate/term refinance. If you hit the $135k ARV, that's a cash-out loan amount of $101,250, which will get you a better rate on a 30 year fixed.

The downside here is that you're incurring closing costs twice. But, this enables you to be more liquid, quicker, and get a lower 30 year fixed rate on the exit/refi of the bridge loan. Also, if you use the same lender for both the short-term loan and the 30 year, then you'll likely get a discount on the origination fee (and potentially other fees associated with the refinance). 

@Aaron Vargas if it's stabilized, meaning rent-ready (doesn't have to be fully occupied, just in leasable condition), you can get a 30 year fixed rate, with a 5 year prepayment penalty, from an investment property lender (non-bank, DSCR lender) at 75% LTV for 6-10 units-- 80% might be possible on a case by case basis. Rates for that will be around 5% - 5.875% (not beyond this), which is rather competitive for that asset class/type (MFR of 5-10 units). The rate will depend on credit scores, DSCR, loan amount, state, and LTV.

If you're looking to renovate, then it would be a bridge where you can finance 75%-85% of purchase price & 100% of rehab costs, capped @ 70-75% ARV. This is an interest-only loan where you make monthly IO payments. There's no prepayment penalty. Rates will heavily depend on your experience, credit score, the purchase price + rehab budget. I would assume 7.5% - 9.5%.

@Chris K. there are direct investment property lenders that can do a 75% LTV cash-out refinance @ the 3 month mark if there's debt against the property and 6 months if it's owned free & clear. These are DSCR or property cash-flow loans. Rates are not too far off from conventional.

Hi @Sam Singh -- this seems to be an old post but wanted to follow-up. There are investment property lenders that can do a portfolio refinance at attractive rates as long as the properties are valued @ $150k or above -- most likely 4.500% - 4.875% for a 30 yr fixed, 5 yr prepayment penalty at 75% LTV for cash-outs.

Hey @Cory Cannon -- what's your purchase price and rehab budget? There's a few ways to structure this but that info is very helpful in providing some insight/guidance. You should be able to get 80% of the purchase price out and have additional funds for the renovations that would be released to you in draws or could be 1 single draw once you're done with the rehab since it's a light reno project. 

Hey @Tony Salemi - if it's rented and you've owned it for more than 3 months, then you can easily do a 75% LTV cash-out refi (as long as the property's rental income was enough to cover the monthly loan payment).

Hey Todd, these aren't conventional loans. There's no cap. But that's not exactly industry standard, it may vary by lender. I know of some that won't go above $2mm outstanding to an investor. 

Hey Todd, same as @Stephanie P. don't know much about the two companies you mentioned in your initial post (that doesn't mean anything negative, just never came across them). 

This is a pretty ideal time to be doing a portfolio refi. It depends on your portfolio's characteristics (and your credit score, liquidity) but the typical range is about 4.75% - 5.5% for a 30 yr fixed, with a 5 year prepayment penalty (if prepayment penalties are allowed in your state -- some states, like OH, MI, PA have restrictions on prepayment penalty terms & fees). The benefit is that the rates aren't too far off from bank rates (like they once were) but the process is much better/easier and less is required of you. 

Hey @Robert N. you can do a 75% LTV cash-out refi @ 4.75% - 5.875% based on the property's cash-flow and you credit score. It should be around 1.5 - 2 pts. Rate will be affected by property type, state, prepayment penalty term, DSCR, your credit score, LTV, and loan amount. It's easy to get a quote and breakdown.

The issue with buying in cash is that most lenders want at least 6 months of seasoning before they use the appraised value for the LTV -- otherwise, they're using your cost basis (purchase price + documented reno costs). With that one you took the $50k loan, you'll be able to cash-out refi pretty quickly. You can close a DSCR loan in 21 days or so.