All Forum Posts by: Noah Wright

Quote from @Griffin Malcolm:

Hey everyone, I'm in the refinance step of my first BRRRR and am thinking about how I can fund my next deal. I had to put about 25k of my own money into this first deal between the down payment, agent commission, inspection, closing costs, and holding costs, so I'd like to get as much of that covered as I can on my next deal. I'm familiar with how a hard money loan is structured, but structuring a deal from a private lender seems like the wild west. Is it purely interest? Points and fees like a traditional bank? Obviously would change from person to person, but I'm curious what people have used before that has been effective for both parties.

Ultimately, my vision is partnering with a private lender so I can spread my funds across multiple deals at once and scale quicker; I'm really happy so far with my agents, contractor, and refi lender, so I feel like getting a great lender would be the next step for me. Thanks in advance!

There are definitely a lot of ways to structure a deal, and several abstract factors can come into play. To make things more concrete, it helps to get specific. For example, sharing details like an example property address, how much of your own capital you're able to contribute, your goals for the property, and what your exit strategy looks like can all help potential lenders better understand the situation and make informed decisions. The more clarity you can offer, the easier it becomes to align with the right financing strategy.

Quote from @Account Closed:

Hey Daniel,

I ran some numbers for you using the Cashflow Analyzer Pro ...

 This is such an amazing community, just another example. Thanks for sharing that tool John, really fantastic 

Quote from @Account Closed:

Quote from @Noah Wright:

Quote from @Account Closed:

Election…

Surely you’re not implying politics are involved ? That would be absurd /s

Hey Kim, welcome to the world of real estate investing! 🎉

It’s awesome to hear that you and your husband are ready to dive in. Frisco and the broader North Texas area have incredible opportunities, and it sounds like you're already doing some great research on your options!

Whether you decide to rent your current home and move or buy an investment property to rent or flip, having the right financing strategy will be key to making sure your deals are profitable and sustainable.

Here are a few loan options that might help based on your strategy:

1. DSCR Loans (Debt Service Coverage Ratio) – If you're looking to buy a rental property, this could be a great option. DSCR loans are based on the cash flow of the property rather than your personal income. This can be really helpful if you're planning to scale up your portfolio or if traditional financing methods don't work due to self-employment or limited traditional income.
   
2. Bridge Loans – If you're leaning towards flipping a property or doing major renovations, a bridge loan can give you short-term financing to get the property ready for sale or refinance. These loans are flexible and designed to help investors move quickly on properties that need some TLC before hitting the market.
   
3. Cash-Out Refinance – If you plan to rent out your current home, a cash-out refi can unlock equity to help fund your down payment on your next property. This is especially helpful if you've built up significant equity in your current home and want to leverage it to grow your portfolio without tying up all your cash.

Since you're based in Collin County, you're in an ideal market for growth. I’d love to connect and chat more about how you can leverage these options based on your goals. I specialize in investment property loans, and I’m happy to help you figure out which loan type would fit your strategy best.

Also, regarding your question on meetups—there are some great real estate investment clubs in North Texas (Dallas REIA, for example) that host regular networking events. I used to live in McKinney and there are great communities to meet seasoned investors, agents, contractors, and more. Might be fun to organize an outing to Top Fun Ranch, they just had new zebras :)

Feel free to reach out anytime, and let’s get you closer to your first deal! 😊

Best of luck to you both!

Quote from @Account Closed:

What was supposed to help the market, just went the wrong way. Yes, I understand why, but that doesn't help matters.

"The average 30-year fixed-rate mortgage rate jumped 27 points from 6.26 percent to 6.53 percent on Friday"

I guess I go back to buying properties with zero down, taking over 3% mortgages. (instead of getting new financing)  A $300,000 mortgage at 3% is $1,264 - but a $300,000 at 6.53% is $1,902 - so I simply save / cash flow $638 a month. I love those deals.

Yes, the spike in rates on Friday was largely driven by the strong jobs report. The U.S. economy added more jobs than expected, which signals robust economic activity and pressures the Federal Reserve to maintain higher interest rates to combat inflation. A strong labor market can lead to wage growth, which further fuels inflationary concerns, making the Fed less inclined to cut rates in the near term.

However, many recent jobs reports have been revised downward after their initial release. This has become a trend, where the initial numbers appear strong, but subsequent revisions show a weaker-than-expected labor market. If this happens again with the most recent report, it could indeed alter market expectations for the Fed's mid-term trajectory, potentially putting aggressive rate cuts back on the table.

In the short term, though, the market reacts strongly to the initial data, and the Fed remains in a "higher for longer" stance regarding rates. Investors and market participants are pricing in the possibility that rates could stay elevated. That being said I see clients achieving 2x monthly cashflow returns on investments even with 7% mortgages. It's not the loan, it's the home.

Hi Ido,

Welcome to the community! Your journey from professional fencing to real estate is truly inspiring. The discipline and precision you've honed in sports will surely serve you well in your new venture.

It sounds like you’re already making great strides with your rental and flipping projects in St. Louis. Collaborating with a local investor can definitely enhance your efforts and provide valuable insights into the market. I'd love the opportunity to provide some low numbers for your next round of financing,

After all, in both fencing and real estate, it’s all about finding the right opening!

Best,

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