All Forum Posts by: Ross Francis

You've come to the right place! I'm confident you'll have no trouble finding the right lender within these forums. The DSCR product you choose will largely depend on your overall investment strategy. Are you more focused on short-term cash flow, or is your priority long-term wealth building through property appreciation?

One thing to consider is that the DSCR calculation will likely include monthly HOA fees, which could limit your borrowing power.

Happy to be a resource—best of luck!

0 Votes

Chicago, Illinois

Quote from @Melissa Odom:

Hello,

I am new to real estate investing. I currently have 3 LTR and soon will be remodeling a small family-owned shopping center in Wimberley, Texas. My question is how can I leverage my 3 rental properties to cash out money for the remodel? Doing a conventional loan for each property is out of the question due to my debt-to-income ratio. I have recently been learning more about DCSR loans. All three properties have positive cash flow - not a lot, but I am not losing money.

One lender I have spoken with stated that the DCSR loans are not regulated. In my situation I can only borrow 70% of LTV. He also stated a 3% origination cost. Is this for all DCSR loans or can these items vary?

I have also been told by multiple people that I should create an LLC or Trust. Maybe one LLC for all 3 properties or one LLC for each property? And then I think you can put an LLC into the Trust. I know with conventional loans the property cannot be in a trust or LLC when you go to refinance. That seems to be different with a DCSR loan?

Just reaching out for some feedback from people with more experience than I have in this area.

Thank you in advance for your time and information!

Melissa

Melissa,

Brandon is bang on when it comes to the DSCR product. Not much to add there.

If the concern is max cash out, you can cross collateralize the properties to cut down on costly processing fees. The one caveat being that when it comes time to sell or refinance one of the properties there may be a partial release clause, causing you to pay the bank back more (120%) than the original loan on that particular property.

Happy to be a resource!

0 Votes

Austin, Texas

Quote from @Lisa Sluss:

Hi all -

I have a house on the market that is not selling. It’s priced below value, but people aren’t fond of the area, low walkability score, near a bus stop, etc.

I’m nearing the end of a hard money loan and I’m wondering if it’s possible to do a cash out refinance on a HARD MONEY loan. Will someone lend me money to pay off another hard money loan?

Lisa,
You could use a "bridge to sale" approach. Depending on FICO & experience most lenders will be capped at 75% LTV. As multiple posters have intoned lenders will use the lower of the list price or the as is value to lend off.

Happy to chat!

0 Votes

Atlanta, Georgia

Quote from @Ryan Dunn:

I know the market had priced in a .25% drop into loans for the last few weeks maybe a month. So when do we start to see the extra .25% hit on the loan side?

Why i ask is i am looking for a DSCR loan and hoping to see better loan rates soon.

Thanks

Ryan,

Jay Hurst, posted an excellent explanation it this very sub forum. As most have been saying, it's been priced in over the past month or so.

Happy hunting!

0 Votes

Quote from @Romie Graham:

Hello everyone,

I am completing my second BRRRR and looking to do a cash-out refi. Searching to see if any lenders are doing a cash-out with no seasoning period.

Thank You

Hi, Romie.

We can close on a property at the as is value so long as the property has had verifiable improvements made. No seasoning period.

Sending you a PM.

0 Votes

Cleveland, Ohio

Hi Charlene.

Regarding the most effective way to scale a real estate portfolio, it really depends on how passive you'd like to be, your chosen market/s and risk tolerance.

I'm sure that since you've found yourself on the bp forum you're familiar with interest only financing, seller financing and the BRRRR strategy.

Happy to discuss further! Sent you a DM.

0 Votes

Very helpful!

Thank you, Mary!

1 Vote

Portland, Maine

Good Afternoon,

Wondering if anyone could speak to maintenance costs on multi family properties in the great Portland market.

Interested to hear from investors that have held properties in the area and whether they've felt a decline in maintenance for the winter months.

Thank you in advance!

1 Vote

Portland, Maine

Quote from @Sylvie Kuzminski:

Yes, I just started using DSCR loans this year. They are a game changer. DSCR lenders don't care about you income, how many other mortgages you have or any of that. They care about your credit score and how much money the subject property makes (you will need a DSCR of 1.5 with most lenders). There is no limit on how many loans you take out, you can close in an LLC (they actually prefer this.. I don't know if anyone using DSCR loans closes under their name).

The downside- there is a bit of a barrier to entry. When I was doing my first DSCR deal, they placed a great deal of emphasis on my experience. How many properties I have, how many I've sold, income produced from those properties, my property management experience and so on. Once you get your foot in the door, however, they mainly care about cash flow from the subject properties.

Down payments are around 20-25%, but I've seen as low as 15% for larger loans ($1m+). Closing (in theory) can be as quick as a few weeks.

Interesting. 1.5 DSCR seems high, especially in this market. I'd be curious to know which lenders require a DSCR ratio of 1.5+. Is that an ITI calc or a PITI calc? Can you shed any light on that?

As to whether you can close in a personal name, I can only speak to CV3's approach and that is not an issue or a detriment to rate.

1 Vote

Hi, @Debbie Weber.

It will depend on your buy box, strategy and approach. i.e. are you intending to take on more cosmetic flips or are you going to be gutting the property, moving walls and/or extending sf?

It sounds like you've already got a plan of attack, but you'll want to do your research as to which lenders will provide the most advantageous terms to a "newer" investor.

Happy to be a resource! Good Luck!

1 Vote

San Antonio, Texas

All Forum Posts by: Ross Francis

Ross Francis has started 1 posts and replied 11 times.

Post: DSCR Loan in Illinois

Post: DCSR, LLC, and Trusts

Post: Refinancing a hard money loan

Post: When do you think we will see the .5% rate drop hit loans?

Post: No seasoning periods for cash out Refi

Post: What are your experience with Funding Options?

Post: Maine-tenance on multifamily

Post: Maine-tenance on multifamily

Post: Have you used a DSCR loan?

Post: Private money lender needed