All Forum Posts by: Ryan Hehman

Welcome and congrats on your early sales success, not a small feat!

Competitive Rates and Terms for Vacation Loan Rentals:

Interest Rates Starting at 4.975%

30 Year Fixed

Max LTV 80%

Financing based on minimum Debt Service Coverage Ratio of 1.2

Units must be leased or rent-ready

Reach out for More Info!

Second Patricia's comment above - Visio can do this without a problem, and the appraiser will take into account short term rental rate info from AirDNA to qualify the unit's debt service coverage ratio.

FYI lenders on new construction sometimes want to see a track record of previous builds. 

I agree here that "just trust me" is not a helpful option. Most lenders are able to provide terms sheets up front with some key pieces of information from the borrower about the asset and borrower creditworthiness. It's great when there's a clear and concise term sheet available quickly and that's certainly the gold standard. In my experience, commercial lenders run the gamut in how they proceed. Some will shoot out rates and terms from the hip in an email (lazy? or just casual?) Other lenders always require an application before issuing rate and terms or a Letter of Intent. 

In either situation though, it's less likely for commercial lenders to provide a rate lock, and the rate may change until the loan is through underwriting. At this point, your best course of action is just to talk with different lenders and see what your options are before moving forward with him. 

Mike's advice above is spot on regarding LTV and bringing a loan scenario to a lender to talk through the specific deal. Even with non-recourse loans, the borrower's experience, FICO score, and liquidity will play a role in determining what the bank or lender will offer. But it pays to ask around because there are also lenders who will provide a 30-year fixed product on small multifamily properties that are rent-ready.

I am working on a situation like this currently and may be able to help with a little more info. Feel free to reach out through DM if needed

Since it sounds like you have a healthy amount of liquidity, a good option could be a bridge loan to acquire and renovate the property, then refinance out once you've placed tenants and it's stabilized. In this scenario you could preserve most of your capital if that's a major concern. 

If you are looking for a multi-unit investment property that is rent-ready or already rented, you are likely going to need 25% of the purchase price as a down payment, plus closing costs (and having some reserves for deferred maintenance or repairs would be smart, and is sometimes required by the lender). Research the market you're thinking of buying in and look at all the past sales data you can. Contact a good Realtor with experience who can guide you in the multi-family space. Talk to commercial brokers or lenders who can help you find the right financing for the type of project/properties you're looking at. They will tell you what specific information they need from you to secure financing. These things can all happen simultaneously, and in a sense this research and due diligence should be on-going. Best of luck to you! Happy to be of assistance if needed.

The Route 1 Corridor in PG County (Hyattsville - College Park) is a great location for this strategy, with high demand for tenants, a diverse mix of property types (many with basement walk-outs), and relatively affordable prices.