All Forum Posts by: Murray Reginald

I plan to utilize the following strategies ( Direct Mailers, Craigslist, Eviction Records, RE Auctions & BP Market Place etc...) to find a LTRs off market. I don't want to exhaust all of my capital, I currently have $35K on hand, $15K LOC, $80K Equity & $100K in my 401K, I also have an 800+ credit score,
My question is, once a serious seller responds to my marketing strategy I've previously mentioned, what is the best strategy to purchase this deal? I realize if it is a small investment of $35K or under I am good but what if the seller is selling the property for $125K-$150K, what is the best way to purchase this property? Should I use a HML, DSCR or PML? If so, should I reach out to them now to have the capital to proceed? One of my concerns is pulling my credit too soon and lowering my credit score, please let me know your thoughts!!!

Hey Murray,

If the goal is a quick close, DSCR may not be in your favor. These loans typically take 21-45 days depending on how clean the loan is.

I would recommend a stabilized bridge loan if the goal is to get in quickly and the property has no deferred maintenance or repairs needed.

If it does need repairs likely a fix and flip loan is your best bet. Most can close in 14 days and can do up to 90% LTV/100% Rehab if the ARV is there.

Hi Erik, Thanks for your suggestions however, what is a stabilized bridge loan?

0 Votes

Houston, Texas

Quote from @Sarah Hatton:

The time of financing is going to depend on a few things...

1) How do you plan to write your offers? If your marketing strategy is a QUICK close with sellers, you can't go the DSCR route. Best case scenario these loans will close in 20 days (if all the stars align), in reality they average 30 days.

2) I understand the end goal is LTR but if you're calling eviction records, auctions, craigslist, etc chances these homes are going to need a rehab component. Not to say this is always the case, but if someone is being evicted chances are they are not maintaining their home. If you plan to rehab, rent, and refi then a HML or PL (same thing, really) is a good option.

3) The last piece I would mention is to line up your capital now. If you plan to pull on equity, aka HELOC, you're looking at around 30 days. Obviously pulling on the 401k will be faster, but that may come with some tax disadvantages.

The good news is that whether it's DSCR/HML/PL no one should be pulling your credit upfront or taking deposits. You can get a preliminary approval with soft quotes then once you have a property under contract and start the loan process you can approve the credit pull.

Good luck with all of this. Feel free to shoot me a dm with any questions!

Hi Sarah, thanks for the information I am planning on the BRRRR strategy so therefore I will more than likely need a HML or PL to execute my plan. If the property does not need any rehab then I will go the DSCR route. Thanks Again!!!

1 Vote

Houston, Texas

Hi BP,

0 Votes

Houston, Texas

Quote from @Eliott Elias:

You don’t search for them, you create them. If deals were out there to be found, they would have already been sold before you have even seen them. It takes constant follow up and relationship building to find deals.

Makes sense!!!

0 Votes

Houston, Texas

Hi BP,

Just curious if anyone is finding a good deal on SFH rental properties (i.e. Cashflow, ROI), if so where are you searching? I am currently searching on HAR but no luck yet, I do realize it's a tough market to find good deals but I am not really seeing anything that comes close to the 2% investing rule, I am seeing tons of 1 % or less. I'm looking forward to the price/rate drop whenever that is, because this should help with a better cashflow. Can anyone please share some suggestions as to me finding a 2% deal or even close to the 2% investment rule? I love to here your input!!!

0 Votes

Houston, Texas

Quote from @Ryan Stuckey:

Quote from @Murray Reginald:

Quote from @Ryan Stuckey:

Simple way to look at it: Is it rent-ready (i.e. no rehab needed to get to market rates)?

Yes - pursue a long-term rental loan (generally either conventional with all the hoops to jump through, or non-bank DSCR loan with a bit higher rate but a much easier process (qualify on the property, not your income...and close in a business entity to scale better)

No - pursue a short-term hard money loan (expensive but can be worth it if you plan and execute well) to buy the property and obtain rehab funds in one go, execute the rehab over a few months, then either: 1) flip/sell or 2) hold/refinance to the lower-rate long-term loan mentioned above. This refinance could potentially involve cash out if you've added enough value (i.e. the purchase price was very good) and seasoning requirements are met.

Hi Ryan,

My plan is to look for distressed properties that need rehabbing however, if I found a good deal on a rent ready property I would not be opposed to it. It seems like a DSCR loan probably is my best option because I don't have the capital to use to purchase a property. Do you know if DSCR do loans on rehab properties?

Hey Murray, you will certainly need capital to close any loan, especially a DSCR which is 20% minimum DP these days. The least DP options are on short-term rehab loans, possibly 5-15% DP but you almost certainly need prior rehab experience (as owner) and good credit to reach those levels. Also, closing costs of 3-5% are added to any loan and are usually paid out of pocket by the borrower at closing (i.e. further capital required).

DSCR loans are only for rent-ready properties. It depends on the rental income to drive the loan terms.

I spoke with a HML & DSCR lender today and they explained some information to me, I am understand the 9.99% however, I don't clearly understand the 1 pt. They will be able to do a HML for 6 months then I will refinance to a DSCR or Conventional Loan for long term.

0 Votes

Houston, Texas

Quote from @Ryan Stuckey:

Simple way to look at it: Is it rent-ready (i.e. no rehab needed to get to market rates)?

Hi Ryan,

0 Votes

Houston, Texas

Quote from @Ash Hegde:

Is this for a BRRRR property - are you planning to hold it and rent it out after purchase and rehab? Hard money loans are meant to be short term and have higher rates than other loans. You will want to refinance to a conventional or DSCR loan as soon as possible after rehabbing the property and getting a renter in. Different loans have different refinance requirements, conventional may require you to own the property for a year before a cash-out refinance but you might be able to get a DSCR loan after only 3 months. A DSCR loan does have higher rates and fees than conventional, though.

Hi Ash,

So it seems like you saying its best to use HML if you you are flipping or Wholesaling a property? I plan to do the BRRRR strategy to hold and rent, so do you think the DSCR loan is the best financial method if you don't have the Capital up front?

0 Votes

Houston, Texas

Hello BP,

I am looking for a HML for an investment property, I've heard of all of the scams out there and wanted to know if anyone has used a HML and could you recommend a HML? Someone mentioned to try KIAVI however, I don't no anything about them, any advice? I plan to reach out to them to discuss the options they have Also, I am attending a 3 day RE workshop through REIA this weekend and may be able to find more information about HMLs, I've heard that you should refinance the loan after the purchase, why am I refinancing? And when should I refinance the loan? I'm sure this information will be explained this weekend but I am eager to know!!!

0 Votes

Houston, Texas

All Forum Posts by: Murray Reginald

Murray Reginald has started 29 posts and replied 74 times.

Post: Finance Strategy to Purchasing Off Market LTRs

Post: Finance Strategy to Purchasing Off Market LTRs

Post: Finance Strategy to Purchasing Off Market LTRs

Post: Finance Strategy to Purchasing Off Market LTRs

Post: Finding A Good Investment Property

Post: Finding A Good Investment Property

Post: Finding A Hard Money Lender

Post: Finding A Hard Money Lender

Post: Finding A Hard Money Lender

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