All Forum Posts by: Noah Wright

Quote from @William J Anderson:

At GenAlpha3 LLC, our mission is to provide quality, affordable housing through ethical management, ensuring safety, comfort, and fairness for all residents. We aim to create a harmonious living environment by adhering to all relevant laws and fostering a community based on respect, transparency, and continuous improvement.

Hi William,

It's great to see your mission at GenAlpha3 LLC, fostering a strong sense of community and providing affordable housing. That focus on ethical management and resident well-being is inspiring!

If you’re ever exploring options to grow or improve your properties, a DSCR loan might be a helpful tool. It’s designed with investors like you in mind—where rental income speaks for itself, and there's flexibility to match your community-driven goals.

Feel free to reach out if you'd like to chat or share ideas. We're all in this to build something meaningful, and I'd love to hear more about what you're working on in Norfolk!

At your service,

Quote from @David Hertz:

Hi,

I'm looking for some advice on how to create the right strategy for a creative financing project:

The basics:

The seller wants to continue living in his house. 

Purchase price is 500K. Rental income is about 4800/monthly....

David,

If I'm understanding you correctly, a DSCR loan could be a fantastic and elegant solution for this creative financing situation. Here's why:

With a DSCR (Debt Service Coverage Ratio) loan, you can leverage the rental income from the property—like the $4,800/month rental revenue—instead of relying on the seller's personal credit or income. DSCR loans don't require personal income verification or a debt-to-income ratio, making them ideal for properties with strong cash flow, even if the current owner has credit issues.

Here's how it could work:

1. You could use a DSCR loan to refinance the hard money loan, securing more favorable terms without having to involve the seller's credit.
2. Since the rental income easily covers the property’s debt service, you’ll be in a good position for lender approval, bypassing the conventional mortgage route.

This approach could allow the owner to stay in the house, while you take over financing with a less restrictive structure. It's not "no-questions-asked" lending, but very close...

Happy to help you strategize further!

Noah

Quote from @Priscilla Chin:

Hi everyone, 

I'm looking to buy my first long term investment property and am not sure whether I'm approaching my research for rental comps correctly. Please give me feedback...

Hi Priscilla,

Your approach to researching rental comps and market temperature is solid, but there are a few nuances that can help refine your process and give you a more accurate picture of rental demand. Let’s break it down:

1. Understanding Market Temperature on Zillow:

Zillow’s "warm" or "hot" market indicators are a good starting point, but they reflect overall real estate activity, not just rental demand. The market could be "hot" for home sales, but that doesn't always translate to rental demand. Keep in mind that it’s a broad overview, so combining it with more localized research is key.

2. Investigating Days on Market:

When you see homes sitting on the market for 60+ days, it does raise a red flag, but it doesn’t necessarily mean rental demand is low. Consider other factors:

• Pricing: Is the rental price competitive for the area? Sometimes homes are overpriced relative to the amenities or condition.
• Seasonality: Rental demand fluctuates depending on the time of year. A home sitting for months might be because it was listed during a slower rental season.
• Marketing and Property Management: Some landlords don’t market their properties well, or they might have strict tenant requirements that reduce the pool of potential renters.

3. Deeper Dive into Rental Demand:

Here are a few alternative ways to gauge rental demand:

• Local Property Managers: Reach out to property managers in the area for insights on vacancy rates, tenant demand, and how long it typically takes to rent similar properties.
• Vacancy Rates: Research the average vacancy rates in that zipcode through local real estate reports or rental listing platforms like Zumper or Rentometer.
• Rent Growth Trends: Check whether rents have been rising, stagnating, or falling in that market over the past few years. Consistent rent growth can signal strong demand.
• Job Market & Population Growth: Rental demand often follows job and population growth. If you’re investing in an area with new employers, infrastructure, or young professionals, demand could stay strong even if current listings are stagnant.

4. Competition and Listing Quality:

If homes are staying on the market, it could also be due to stiff competition in that neighborhood. Check whether there’s an overabundance of similar rentals or if newer, more modern buildings are attracting tenants away from older stock.

You're on the right track by doing detailed research, but don’t let longer days on market automatically steer you away from a zipcode. Dig deeper into the cause of those vacancies and look at broader trends like job growth and vacancy rates. If you're unsure, talking to local property managers or even prospective tenants can give you a clearer sense of whether a property will rent quickly.

Best of luck with your first investment!

It sounds like you're in a unique situation with your project in Davenport, Andrew. Since you've already made strides with parcel separation and have a clear vision for the duplex, it’s promising that you're reaching out for experienced partners. I may be able to help you secure a no-experience ground-up construction loan, even though lenders typically require someone with prior construction experience.

If you're willing to reach out, I’d be happy to discuss the possibility of pulling some strings to get this project funded. The fact that you're already working with an existing property and clear goals for redevelopment shows lenders that you’re serious. Feel free to reach out if you're open to exploring loan options, and we can discuss how to make this happen.

It may be possible to pull some strings and get you a no-experience ground-up-construction loan, I'd be willing to go to bat for you. Feel free to reach out

Seeing rates between 5.5 and 6.5 for well qualified borrowers these days, happy to walk through customized pricing with you!

Depending on the size of the ADU vs the main property, you would probably be looking at either a "heavy rehab" loan - or a "ground up construction" loan.

Quote from @Jacob Bremer:

Nice to connect! Yeah, I’d be open to this as well. Property A is at 3.4% interest right now so I don’t think I can reasonably cash out refi on this one. 

I totally understand you are hesitant to touch the 3.4%, but keep in mind you can always cash-out now, expand your portfolio, and refi down later. As the saying goes "Date the rate, marry the home" 

Quote from @Lea Ramirez:

Hey everyone,

I’m looking for some advice. I’m currently unemployed but have managed to save up about $90k that I want to use to buy a home. The plan is to live in part of the home…

Hi Lea,

Congrats on saving up $90k! That’s a solid start, and it opens up a few financing options despite being unemployed. As a mortgage broker, I’ve worked with clients in similar situations, and I’d be happy to guide you through this process. Here are some thoughts on the options you’re considering:

1. Bank Loan: It’s true that banks typically look for steady income, but a large down payment (20-30%) and good credit could help strengthen your application. If you have a co-signer with a stable income, that could significantly improve your chances. Banks might also consider potential rental income to offset mortgage payments, so documenting your plan to rent out the rooms could help.

2. Private Money Lender: Private lenders can be more flexible, focusing on the property value rather than your income. While interest rates are higher, they could work as a short-term solution to help you secure the property, and you can always refinance later once you have a steady income.

3. Hard Money Lender: These loans are generally used for short-term financing and come with higher interest rates and shorter terms. It might be a bit risky as a first-time investor, so I’d recommend this option only if you have a clear exit strategy, like refinancing or selling the property within a year.

4. FHA Loan: Since you plan to live in the home, an FHA loan could be an option, though documented steady income is required. However, FHA loans also allow non-occupant co-borrowers, so if you have a family member or close friend willing to co-sign, this might be a viable route.

5. Creative Financing: Seller financing or a rent-to-own agreement could work if you find a seller willing to be flexible. A DSCR loan (Debt Service Coverage Ratio) is another option that offers low rates, as these loans are based on the potential rental income of the property, However they are for investment properties only. This means if you're living in the home, you are not eligible for the DSCR.

Best regards, 

Quote from @Karl Johan Nyqvist:

Hello BP Community,

My name is Karl, and I’m an architect and real estate investor based in Europe. I’m looking to pivot my focus to the North Carolina market and would appreciate your insights.

I’m specifically in search of lenders who offer refinance loans tailored for non-U.S. citizens…

Hi Karl,

Welcome to the North Carolina market! As a mortgage broker specializing in non-QM loans, I’ve worked extensively with foreign nationals like yourself who are looking to invest in U.S. real estate. I can definitely help you find refinance solutions that fit your strategy, including options with shorter seasoning periods and up to 75% LTV cash-out refinances.

I have relationships with dozens of private lenders who cater specifically to foreign investors, all of which offer flexible terms that could align with your goals. Working with a broker like me allows you to navigate these options efficiently and ensure you get the best possible deal tailored to your situation.

If you're interested, feel free to reach out, and I’d be happy to discuss your project in more detail and guide you through the process.

Looking forward to helping you succeed in the U.S. market!

Best regards, 

Great questions! Here are some insights regarding the potential tax implications and mortgage process:

1. Tax Implications for Trustees: When the property is sold, the trustees may need to consider capital gains tax on the appreciated value of the home since it’s currently in a trust. However, if the home is inherited, the beneficiaries typically receive a step-up in basis, which can minimize capital gains tax when the property is eventually sold. It’s advisable to consult with an estate attorney or tax advisor to understand the specific implications for your family’s situation.
2. Getting a Mortgage for the Flip: Yes, the mortgage process for a flip would generally be similar to purchasing any property on the open market. You’ll need to provide documentation such as income verification, credit history, and possibly a property appraisal. If you’re considering financing renovations, look into renovation loans that cover both the purchase and improvement costs.

It sounds like you're making progress in navigating this situation thoughtfully. If you have more specific questions about financing options or renovation strategies, feel free to ask!

Best of luck,
Noah

This response provides clarity on Peter's inquiries while maintaining a supportive tone.

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