All Forum Posts by: Sean Maloney

Quote from @Sean Maloney:

Quote from @Kristen Petrosky:

Do not take out a hard money loan! It sounds like you could be wanting a DSCR loan. Let me know if you have questions on what that looks like!

 Thanks for responding.

I think I'm figuring it out a little bit.

A line of credit that is based on 4 or 5 properties to give me a large amount of available $$$ seems like one of the ways I should go. I also have another project by just combining 1 property with it would give me the equity piece needed to do that deal and its a long term deal so having one of my other properties tied to it would be ok with me.

I have been looking into DSCR loans but the one challenge I still see is they want 20% down cash. if you know of a way to use equity in stead of cash down that is what I've been trying to ask and would like to learn more for sure.

Commercial Portfolio Financing. 

Existing portfolio can either be first mortgage grouping, or collateralized asset's for the forward actions. 

A line of credit is established, lending empowerment to do acquisitions via "all-cash-offers". Upon closing, the newly acquired property is wrapped into the commercial mortgage financing and line of credit replenished. 

Structure looks similar to that of a DSCR but fee's and interest rates are generally substantially less. Most recent was 7.45% as of just weeks ago, no 2pts on origination.

And line of credit is 0% while not in use, only utilized fund's are "on-the-clock" so to speak. 

Amortizations are often in range of 20-30yr with balloon ~7/10yr. I prefer 25yr am. with 7yr balloon. And for those who say a deal won't pencil out at 25yr am, then don't do it, it's that simple, not find other way's to over-leverage. 

But one need's a portfolio, to get into commercial portfolio lending. Once there, it can be a big game changer. 

Do not take out a hard money loan! It sounds like you could be wanting a DSCR loan. Let me know if you have questions on what that looks like!

“Several free and clear properties in Erie, PA” equals total equity of 11k?

Lol joking

I'd recommend looking into our All in One Loan. Sounds like a perfect fit. Shoot me a message for more info if interested!

Utilizing built-up equity can open doors to various deal-securing options. Cross-collateralization involves leveraging equity from one property to secure a loan for another, offering an alternative to refinancing or HELOCs. Portfolio loans enable borrowing against equity in multiple properties, while hard money loans provide swift cash access, though they can be pricey. When considering these options, partnering with experienced lenders familiar with investor needs is crucial. In Houston, I recommend Bridgeview Capital, Hard Money Lenders of Texas, and American Hard Money. Crafting a detailed plan showcasing fund utilization and demonstrating financial competence is vital when presenting proposals to lenders. For instance, in a cross-collateralization scenario, having $100,000 equity in your house allows you to secure an 80% loan for a $200,000 rental property, requiring only a 20% down payment. This approach illustrates how leveraging equity can facilitate deals without the need for refinancing or additional payments.

You want to make sure that if something goes wrong with the new properties that you lose the paid off properties or are at least forced to sell them? 

A heloc on property a to buy b and it fails and you’re forced to sell you still have a with an outstanding heloc.  

Using the equity in a to buy b means if b fails even a little you have to sell property a or bring cash to make up a’s equity. 

That’s the downside, what’s the upside to your plan instead of a heloc? You aren’t “saving” interest as your property b loan would be 100% of the purchase price (to pay off the seller) instead of 75-8o%. 

The “cheapest” way, assuming you don’t have the cash would be a heloc on your primary if your primary rate is too long to refinance. Then second is same set of options on an investment property. 

Quote from @Sean Maloney:

I have several free and clear properties. Besides HELOC or lines of credit are there any ways people are using built up equity to secure their deals? I have heard of a way to tie a property with equity to others to satisfy the need for money down.

Has anyone done this? What lender did you use? How would this be explained to other lenders and what kind of terms? 

I would like to use all my built up equity with out refinancing or taking on the additional payments that come with the obvious ways to typically pull money out.

- Sean Maloney

Erie PA.

Sounds to me — after reading some of the other comments — that what you want to do is arrange a portfolio mortgage with the proceeds used to buy more properties for the portfolio (and be subject to the mortgage). 

is that right?