All Forum Posts by: Mark Williams

@John Seitz We have been getting our windows for a great price from Lowe’s. I joined for the first time as a Pro member and got an additional 20% off.

They had a slightly off size that we were looking for that no one else carried. It took less than 1 week to get them delivered to the store and another 2 days for shipping to site. Couldn’t be happier.

Hey everyone,

I recently got my real estate license and joined Keller Williams, and I am trying to connect 3 people per day to expand my network.

Hard money / fix and flip lenders vary on their underwriting guidelines but generally they are looking for:

1. Your Credit Score: 680+ or 700+ will get you better terms depending on the lender. 660 is the minimum for many lenders. Pricing generally is impacted by every 20 point increment of your middle mortgage FICO mortgage score so a 740-760 score will get a better rate than a 680-700 score.

2. Type of Market: Is it a declining market, is is suburban or is it rural? If an appraiser marks it rural, the lender may not do it or it will be a lower LTV.

3. Experience: Do you have any? Some care less about this but generally will impact how much they will lend to you. Some lenders will do up to 90% of purchase price and 100% of rehab up to 70-755% of ARV.

4. Do you have an LLC set up? Most lenders require this.

5. Most lenders will want a minimum of $100K for the property acquisition and rehab. Many lenders will charge additional rate increase if loan is under $150K. Lenders will generally not lend more for rehab than for the property itself.

Most lenders will generally lend on 1-4 units and condos. These are generally 12-24 month interest only loans that borrowers will generally pay back by selling or flipping to long term financing like DSCR loans.

More on DSCR loans:

DSCR loans won't use your income to underwrite the loan.

DSCR loans are based off of down payment, credit score and either actual or market rents so it helps to supercharge an investor's real estate goals and net worth.

Here's a bit more in detail about how rates are calculated for DSCR loans:

1. Credit score- the higher the best. 760+ generally gets best pricing for investment property loans with most lenders

2. Loan to value ratio: The higher the loan to value ratio (LTV) is, pricing takes a hit. So your pricing will be higher for a 80% LTV loan than for a 60% LTV loan.

3. Prepayment penalties- usually 1-5 year terms. The shorter the prepayment term has an impact on increasing the rate.

4. Are you cash flowing the property? More on how that is calculated below. Is your DSCR ratio greater than 1-meaning are you cash flowing (according to the lender's criteria of mortgage, property taxes and insurance (and HOA) if applicable). Many lenders will not do a DSCR loan unless cash flowing. If they will do a loan with less than 1, the pricing takes a hit. This criteria is for 1-4 and 5-8 unit programs.

I've included an example below to help illustrate this.

So different lenders have different rates (which do vary even for DSCR loans) but these are factors they all consider.

See example below:

DSCR < 1

Principal + Interest = $1,700

Taxes = $350, Insurance = $100, Association Dues = $50

Total PITIA = $2200

Rent = $2000

DSCR = Rent/PITIA = 2000/2200 = 0.91

Since the DSCR is 0.91, we know the expenses are greater than the income of the property.

DSCR >1

Principal + Interest = $1,500

Taxes = $250, Insurance = $100, Association Dues = $25

Total PITIA = $1875 Rent = $2300

DSCR = Rent/PITIA = 2300/1875 = 1.23

DSCR lenders generally let you vest either individually or as an LLC. It's a great way to increase your net worth and these loans can also be used to pull cash out of a property as it appreciates allowing you to reinvest money into new deals.

Quote from @Taylor Davila:

Hello Everyone, 

I am looking to start my real estate investing journey. I have about 50k of liquid money I have access to. I am a professional athlete and do not necessarily know which city I will be in next year. Ideally, I wanted to start with a house hack of a duplex or triplex. However, since I do not know how long I'll be in each city I now feel this is not the best strategy for me since the house would have to be my primary residence for at least a year. Do you think a fix and flip is a good strategy to get me in the game or are there better options for my situation? Or is a house hack still the best way to get started and I just have to wait until my job location is more stable?

Thank you, 

Taylor

Given your unique circumstances as a professional athlete who may not know where you will be located in the future, a fix and flip strategy may be a good option to consider. This strategy allows you to potentially make a quick profit without the commitment of having to live in the property for a certain period of time.

Alternatively, you could also look into investing in rental properties in different cities where you have connections or where you see potential for growth. This way, you can have passive income coming in from multiple properties regardless of where you are living at the time.

Ultimately, the best strategy for you will depend on your long-term goals, risk tolerance, and level of involvement you want in managing the properties. It may be worth consulting with a real estate advisor or financial planner to help you determine the best approach for your situation.

I just passed my real estate broker's license and am ready to hang my license in Colorado . I am looking for an investment friendly brokerage that I am able to join. I heard eXp provides flexibility for brokers that are working part time. Does anyone have any experience with eXp? Also, do I need to apply for an inactive license before I apply anywhere? 

Thanks!

In case anyone is interested this is what I settled on and it was well received. A card can be displayed under the sold sign and a stack in the container beneath.

Laser tape measure, or a real one to measure rooms.

Bolt cutters or a small tool kit that goes in the car.

Powerful flashlight for looking in dark homes.

A few spin key boxes to put on vacant homes.

Books on real estate, like The Millionaire Real Estate Agent book, The One Thing, or The Millionaire Real Estate Investor.

Some kind of BP subscription or books.

Hi,

I have done some longer live-in flips and was the buying agent on the current one.

I am now going to be flipping (not live-in) as my main source of revenue and trying to figure out where to hang my license. 
As an agent, I only have experience with the one transaction.

So far I have looked at ExP, Realty One and ReEBroker.    Any experience with these?  Any suggestions?

Would really appreciate any feed back :)