All Forum Posts by: Nate Herndon

@Nicholas Olson from what I read, I see you are looking into 2-4 unit residential multifamily. To add to the conversation, here are some of the minimum requirements you will be dealing with on the private lending/financing side.

1-4 Unit Residential
• 80% LTC max (20% down payment)
• No experience required
• $75k minimum property value
• $50k minimum loan amount
• 660 FICO

5+ Unit Multifamily
• 75-80% LTC max (20-25% down payment)
• No experience required (program options will be limited if no experience)
• $350k minimum property value (lower values possible, must have experience)
• $250k minimum loan amount
• 660 FICO

Hi @Yanina Panfilenka - that is too bad that they aren't accepting! That's a tough one to overcome though if they had an experience that did not meet their personal expectations. Sometimes there are issues with appraisal, title, insurance, or underwriting - but it all typically gets blamed 'on the lender'. I have worked with EasyStreet in the past and have closed loans for my clients using their program.

At this time, I am currently using a different program for short-term rental purchases and it has been performing really well this year. I think I've had 8-10 short-term rental and long-term rental deals close with this other program in the past two months alone.

If you are in need of a new prequalification letter and a different look at the deal from another program, I would be happy to help before we hit the weekend. I will send you a quick message.

@Micah Loewen You may be able to get away with those just fine - doesn't sound terribly expensive. I have also seen escrow holdbacks for cash-out refinances. If a lender wants to see $1,000 worth of work completed, they can hold that in escrow after closing and release those funds after you provide photos of the completed work. I like that compromise since it doesn't delay closing if all else is good-to-go.

Here's a quick example of an appraisal photo that shows no trim in the laundry room. The appraiser made no comment about it as an issue, and it is unlikely that the underwriter would catch something that small either. It just depends on how obvious the repair needs are.

@Micah Loewen there is a chance the property would appraise for the value that you want, but that it would be appraised as 'subject to repairs' as opposed to 'as-is'. Or, if it does appraise 'as-is', but the lender's underwriter determines that there is more deferred maintenance than they will allow for (say $2,500, or something close to that) then that would also be an issue.

Either way, a 'subject to' appraisal and deferred maintenance are both no-go's for a DSCR cash-out refi. If you and I were working on this one to get it refinanced, my recommendation would be to complete the reno before letting an appraiser in the door.

@Rich Solano 

Minimum property value: $75,000

Minimum loan amount: $50,000

I utilize 5-year, 7-year, and 10-year interest only DSCR loans for clients who are needing to meet a 1.00 DSCR threshold in underwriting and/or want to maximize cash-flow like yourself.

These loans are all 30-year terms. A 10-year interest only, for example, is going to have a fixed rate for 10 years and you will not make principal payments during that period. It is actually a 10/1 ARM, so after the first 10 years the rate will adjust once per year for the remainder of the 30-year term. That adjustable rate is also amortized over a 20-year timeframe for the last 20 years of the 30 year term.

Truth be told, most will refinance their 5/7/10 year IO loan before it ever reaches the adjustable rate period. All that to say, what you desire is out there. Rates are in the 7.5-8.5% range. Feel free to shoot me a message to connect and discuss further. 

Sounds like a sweet deal if you're looking for the same - the few 100% LTC programs I know of cap the Loan-to-ARV at 65-70%. So it already has to be a REALLY good deal.

Best I’m using for my clients right now is a 90/100/75 program up to 92.5% LTC that can float down to 10.24-10.49% for 12 months, interest on drawn funds only, at 2-3% origination. All depending on the numbers, of course. 

Hi Pradeep - depending on how quickly you plan to complete the rehab, it may be worth exploring your available resources for refinancing as well. At the very least, you’ll have a point of contact lined up to contact when you’re wrapping up the rehab and ready to start the refinance.

In order to use your appraised value, there are lenders with requirements ranging from ‘no seasoning' to 6-month seasoning. My favorite program has a 90-day seasoning requirement, and we often kick off the refinance around day 45-60 of ownership. A ‘no seasoning' program does exist, but the ARV must exceed $100k. I know that is not always the case for all rehabs.

Good luck on your BRRRR! It looks like you have covered most of your bases.

Hey Renzo, I know that most lenders don't work with values under $100k. However, my favorite program I use for my clients requires a minimum property value of $75,000, with a minimum loan amount of $50,000. It helps that they are also #1 on interest rate out of the 20+ DSCR programs I use.

I close 3-5 DSCR loans in Alabama every month. Birmingham is popular, Montgomery is great as well. The lowest value exception I have received was for a $64,000 purchase, for which that 80% loan was $51,200.

I wouldn't recommend looking for loans too far below the $70k mark, as that is contingent on an exception land and up to underwriter discretion. But we've done it. Let's connect and I'm happy to figure out what will work for you. 

Here is an example loan summary of $75,000 purchase:

Hi Antoine, I utilize a program for client's commercial deals that only has a minimum loan amount requirement of $100,000. The value per unit is not an issue, but it must fall into a top 300 metropolitan statistical area (MSA). Shreveport falls into that top 300 at #140.

Would be happy to connect and discuss further!