All Forum Posts by: Quinton Booth

Ideally, you want to keep that initial financing below 70% of the after-repair-value. That way on a 75-80% cashout you can recoup your cost, and possibly add additional cash to your operating account, to scale your progress toward building a portfolio.

It's not going to happen overnight but with consistent investments, each additional property should add equity, cash, and monthly cash flow to your portfolio, causing a compounding effect to allow you to scale.

Let me know if you have any further questions, but this seems like a great place for you to start.

0 Votes

Oklahoma City, Oklahoma

Victoria,

A cash-out refinance on a DSCR (cashflow/bank statement) program would be suitable for this transaction. Depending on the margins of the deal such as loan-to-cost and rental income this is a great approach to get you max cash in the pocket without considering debt-to-income or personal tax returns.

Let me know if you have any further questions.

0 Votes

New Haven, Connecticut

Hey James!

You are correct, Boston's property values are going to prohibit cash flow. The best way to get around that is to fund a heftier down payment, wait for rates to decrease, or find a 2-4 unit that will allow higher rental income. However, as others have said you may be better off seeking a different market, perhaps a little further outside the main metropolitan area where property values slightly decrease.

Another way around this is simply investing in a new MSA. There are MSAs with better cashflows for investors like yourself, and if you can find a property manager you trust, this won't be out of reach for a first-time investor. Let me know if you have any further questions and I would be glad to assist.

0 Votes

Boston, Massachusetts

Quote from @Isaiah Thelwell:

Hello, i've been hearing different investors talk about a seasoning period when refinancing out of hard money during the BRRRR process. can anyone help me dive a little deeper on what this is/mean?

Isaiah,

Most lenders require 3-6 Months of seasoning. However, options exist that will finance 100% LTC, meaning purchase and material costs can be funded prior to meeting a season requirement.

Hope this helps.

2 Votes

Boston, Massachusetts

Quote from @Luther Epperhart:

I will be soon finishing up two builds on STRentals, under my LLC, in the Smokey mountains I used a hard money loan for. The appraised value after the build will be about double what I will owe the hard money lender. I want to cash-out refi with a DSCR loan. Conventional will not work.
I need to cash-out 75% LTV to have $ for future projects and furniture. My two issues are,

will a DSCR Cash-Out Refi lender take the projected LTR rate or can we do comps for the STR rate? The LTR rate is much too low, but I am in Gatlinburg, so it's a common thing to build assuming STR.

also, will the lender need any seasoning period? I need to get the money as quickly as possible to furnish the rentals and don't want to loose any time as I already have land picked out for the next projects.

Answers/suggestions or recommendations to DSCR lenders/brokers than can help me are greatly appreciated.

Hey Luther,

Some options allow up to 80-85% of Market short-term rental income to be justified to back DSCR. Like others have said, you may run into some issues getting max 75% cash-out if the property is considered rural.

Seasoning should not be a concern as you have owned the property for more than 6 months, but this is worth considering since many products do have a strict 6-month requirement.

2 Votes

Knoxville, Tennessee

All Forum Posts by: Quinton Booth

Quinton Booth has started 0 posts and replied 5 times.

Post: The Strategy Game

Post: Ready to refinance and repeat

Post: Boston Rental Property Advice

Post: Seasoning periods for Refinance?

Post: DSCR Refi with a less than ideal LTR rate, but perfect STR rate?