All Forum Posts by: Ryan Herting

Hey @Pablo Hernandez,

This concept is pretty common in the lending world. If you're capable of putting 20% into a deal many lenders would be more than happy to provide you with a fix and flip/new constructions loan for multiple properties. You should also get on the phone with a lender who can help you with your goals and can strategize with you. 

@Daniel Coleman, could you give me some clarity on your question? If I'm understanding correctly I think you're asking if big investors finance individual multifamily properties (a loan for each property), or, do they group them and finance them all together (under one loan). If so, typically Big Investors finance multifamily properties individually. There are cases when, for example, the investor had two ten-unit multifamily properties under one loan. 

Hope that sheds some light on things. Let me know if you have more questions.

Hey @Frank Rodriguez,

What's your definition of "Good?" What are you looking to get out of your lending experience? I saw on your profile that you are a new investor, but has that changed? Asking these questions to give you a better understanding of the financing options you might have... Unless you are set on only hard money.

Hey BP Family, 

For those of you who primarily invest in the Raleigh market, would anyone happen to know of any LOCAL appraisers there? Any leads would be greatly appreciated!

Hey Noah, 

As a lender, I'm super happy you realize the importance of organization. Makes the deal process much quicker. To start, here are the steps I would take. 

1. Explore your financing options. Hard money isn't your only choice (Your Choices: Banks, Friends and Family, Alternative lenders, Hard Money) 

2. Speak to each type of lender and see how best they can help you with your goals, and do you feel that they will support your investing goals. (You'll learn a lot by hopping on the phone with these people)

3. A breakdown of a deal is very helpful, but proof of prior projects, and your investing trajectory, will go a long way when speaking to a lender. 

Hope that was helpful!

Hey @Aaron Vargas,

For this type of deal, you are looking at up to 85% LTC or 70% of the LTARV (lesser of the 2) 7.5%-11% range for rate, the term is 12 months of interest-only payments, no amortizing loans available for anything more than 4 units per parcel.

The above may vary based on lenders, but in our space, this is what you might be seeing out there. 

Hey @Michael J. Finnegan, have you tried looking in your personal network? Sometimes people who are within the lending or financing space might have someone they can refer. Sometimes your local bank might have great relationships with private lenders.

Also, just so you have a clear understanding of your options, here is a breakdown of lender relationships I would have when it comes to capital: 

1. Banks

2. Family & Friends/ Private Lenders

3. Alternative Lenders 

4. Hard Money

Having a relationship with each of the individuals mentioned above will provide you with the most flexibility when it comes to investing.

Hey @Christian Locke,

1-4 units are still considered residential - anything with 5 or more units is considered multifamily. All seasoning requirements are the same for 1-4 units (6-9months seasoning). The best way to calculate ARV for 4 units is really the same as 1-3. Run your comps.

You can also run a direct capitalization method by figuring out your proforma rents and NOI and dividing by the trending cap rate for that neighborhood/asset class. No difference in LTV on 1-4 units.

I hope this was helpful and let me know if you have more questions.

Hey @Christopher R., 

Yes, that is the case for banks and mortgage lenders, that you can only have 10 conventional mortgages in your personal name. As for the debt to income that might vary per lender. 

If you are looking to continue investing, you'll want to open an LLC and purchase future properties under it.

Hey @NIcholas Hamel, I would first start with creating a base strategy and goal for yourself as an investor. It's a great direction to start your investing career off with, but built a team (lenders, GCs, Realtors, attorneys...) that can support your goals. 

It sounds like you are at the beginning of exploring the BRRRR strategy, but before moving forward on pulling out equity, refinancing your current property, and investing that equity in another rental property I would think about your finances a little further. Not to say your strategy isn't a good direction.

As @Account Closed said, can you afford a net income of zero for a year and pay off a mortgage or loan. As a long-time investor and lender, I always recommend setting up a financial cushion as well that's relative to the size of the property you are buying (i.e. eviction costs, property repairs...)