All Forum Posts by: Selina Giarla

An option is to get a DSCR loan. 1-4 unit programs generally have better rates compared to 5+. These have 30 year fixed options.

More info here:

DSCR loans won't use your income to underwrite the loan.

DSCR loans are based off of down payment, credit score and either actual or market rents so it helps to supercharge an investor's real estate goals and net worth.

Here's a bit more in detail about how rates are calculated for DSCR loans:

1. Credit score- the higher the best. 760+ generally gets best pricing for investment property loans with most lenders

2. Loan to value ratio: The higher the loan to value ratio (LTV) is, pricing takes a hit. So your pricing will be higher for a 80% LTV loan than for a 60% LTV loan.

3. Prepayment penalties- usually 1-5 year terms. The shorter the prepayment term has an impact on increasing the rate.

4. Are you cash flowing the property? More on how that is calculated below. Is your DSCR ratio greater than 1-meaning are you cash flowing (according to the lender's criteria of mortgage, property taxes and insurance (and HOA) if applicable). Many lenders will not do a DSCR loan unless cash flowing. If they will do a loan with less than 1, the pricing takes a hit. This criteria is for 1-4 and 5-8 unit programs.

I've included an example below to help illustrate this.

So different lenders have different rates (which do vary even for DSCR loans) but these are factors they all consider.

See example below:

DSCR < 1

Principal + Interest = $1,700

Taxes = $350, Insurance = $100, Association Dues = $50

Total PITIA = $2200

Rent = $2000

DSCR = Rent/PITIA = 2000/2200 = 0.91

Since the DSCR is 0.91, we know the expenses are greater than the income of the property.

DSCR >1

Principal + Interest = $1,500

Taxes = $250, Insurance = $100, Association Dues = $25

Total PITIA = $1875 Rent = $2300

DSCR = Rent/PITIA = 2300/1875 = 1.23

DSCR lenders generally let you vest either individually or as an LLC. It's a great way to increase your net worth and these loans can also be used to pull cash out of a property as it appreciates allowing you to reinvest money into new deals.

Happy to connect to discuss further. 

 I live on the beach in FL and do all my biz for many years in the Cleveland markets, deals everywhere. All my personals have always been not less than 20% NET cap based on cash purchases. I will close this week on a duplex all in full reno 80k, rented for 19k a year. Sf all in 75k, rented for 1300. TODAY I will go to contract on a 2 br all in will be 45k, rented for 1k. Again best part I am on the beach in FL, 

Good luck 

BTW whoever is telling you to avoid props older then 10 years old, simple has no clue what they are doing. Every property I flipped (about 500 YES 500 )  or owned was built between 1910- 1930. They were built better back then, 

 When you say multifamily - what type (# of units) are you looking at?  This is going to determine the options - 

Generally three buckets:

1) 2-4 Unit

2) 5-10 Unit

3) 11+

 I think you really have trouble understanding loan product. 
With interest only product of course the rate would be higher. Why ? there's more risk to the lender !

But is IO product good ? yes, this product is good if there're two aspect on top of it :
1. asset is appreciating faster than mortgage rate , and second
2. you plan to sell the asset quickly , like in year 2 or 3. Why ?
because with 30YFRM 7% rate, the aggregated principal payment is so low that it's almost meaningless anyway, so IO product can make verything great again.............. as long as you plan to sell it quick.

But this product is terrible in two conditions :
1) when rate is low
And/or
2) if you plan to sell on year 15.

That's a lot on your plate, and you need to start buying time. First off, you need to live closer to work kill that 3 hour commute. I know easier said than done, but sacrifice elsewhere for it. Secondly, quit managing doors & hire a PM get that nonsense off your plate. Cut that commute to 1 hour a day and take those doors to 0 for direct management.

Then, in regards to this, you need to connect with people off of facebook, real estate meet ups in a few localities you want to get into that fit your criteria. Landlord friendly seems to be yours, so red states should be the focus. Narrow down the states, then the cities based off the criteria you want to invest in. Then go take some time off work, visit those cities, go to a happy hour and shake some hands. Be prepared to visit this same area 2-3 times(maybe just on weekends) to get a real feel for the city, the areas, etc., and once you build a network of off-market folks, an understanding of the neighborhood you can take full advantage of the stuff they are showing you.

Right now, you're a casual shopper looking at the retail stores wanting the bargains. It doesn't work that way, the one's in the grind are finding the bargains and putting it for sale at the retail store for you. You're swapping time differently, it's all what you prefer to do as I would approach it very differently. And I'm not talking with no experience on this, I have 3 kids going onto 4 here in a week, have a dozen small businesses, and 40 + houses. Yet I still have time to post on this board, study the markets and see where I want to invest because I buy time. Teams, systems in place, and learning to let go are paramount to truly scaling.

 Off market sellers need to find you, not vice versa. 

 1. SEO

2. Pay Per Click

3. Social media ads

4. Relationships with other investors and/or bird-dogs (ie deal finders)

5. Driving for dollars

There is NO soliciting in this forum. 

@Selina Giarla, what kind of loan are you trying to do and is it for an investment property? If so, what state and what are the details? There may be some additional loan programs depending on the situation. 

 You make it based on lease and what the appraiser determines is market rent minus a factor. You only need to qualify to close the loan. If is a commercial loan you have to keep the rents there in five years when the loan is due, assuming rates are the same or better. For example: Right now an investor whose commercial multi family qualified at 4 % in 2019 maybe cannot make the grade at 8% today so that investor would need to pay the loan down with cash to qualify or sell.