All Forum Posts by: Shane Ward

So i own a rental, in the mid-west, for about a year now and trying to do a cash out refi using only the income from the property, $2000 per month, and not any personal income. Home was purchased for cash in an LLC. my credit score was 710

So the home appraised at 125k and they want to loan 75% @ 6.8%

Origination charges- $9000

1.6% loan points $1500, lender fee 1300, origination fee 3500, ordination compensation fee 2500

Services- $6300

appraisal 1500, credit report 150, 1004d inspection 250 ,3rd party processing fee $900

closing fee 350, document prep 2200, lender title ins 900 

Other - $1600

there is also some recording fees 425, pre paid interest on mortgage ins or property taxes 500, and holding some $ for property taxes and insurance in escrow about another 600

so thats nearly 17000$ in closing costs on a refinance for $100,000

Just feels like way to many fees associated with this, but i don't have much refinance experience either The monthly payment is $600, so Its possible for me to make this work and just move on with my life.  But i hate the feeling that I'm over paying or maybe i just had different expectations that weren't met.

Are people really paying this much? or is it just me and this lender?  

@Shane Ward, can you explain a bit more about how that works? How did you find the HM lender and convince them to work with you on your first deal? How did the first deal work out?

Is it possible to start investing with only $100k in this market? I keep looking at potential BRRRR properties on Zillow and thinking "the numbers just aren't going to work." Most of the wholesalers I know have suspended their direct mail campaigns until sanity returns to the market. Admittedly, since I'm in CT I'm in an expensive and high tax market. But, even so I should be able to acquire something workable to rent out and refinance.

I'm reticent to BRRRR out-of-state for my first deal — but, if I have to, I have to. I just don't want to get burned. I just want to get the ball rolling in the next few months because properties just aren't going to get any cheaper. I'm just really frustrated. I would be extremely thankful for any suggestions as to how to get started. I'm reading David Greene's BRRRR book right now, but I don't want to get myopic if I have other realistic options to get started investing I'm open to them.

@Heather Hall, I like how quickly and easily these DSCR lenders can close. I don't like the higher rate and fees. However, I can actually buy houses and get it done fast, which is what I need at this stage of the game. These lenders have done mortgages on STRs: Visio, Host Financial, American Heritage, LendingOne and RCN. I have used Visio, LendingOne and RCN.

@Heather Hall, I like how quickly and easily these DSCR lenders can close. I don't like the higher rate and fees. However, I can actually buy houses and get it done fast, which is what I need at this stage of the game. These lenders have done mortgages on STRs: Visio, Host Financial, American Heritage, LendingOne and RCN. I have used Visio, LendingOne and RCN.

I have multiple DSCR loans and none are from any of those companies you mentioned. I'm a very direct but also analytical person so i be sure to ask all the tough questions up front because i don't like bad surprises. I always ask about processing fees, prime rates, closing schedules, and most certainly requesting a baseline loan estimate. If they can't or won't answer those questions and are unwilling to give you a loan estimate without pulling a credit check, i walk away. I don't have time for games and dislike when loan representatives act like they can't ball park me a loan estimate. As the consumer, we should be well prepared with your personal info(credit scores, dti, taxes, insurance, etc) to get a baseline estimate. It goes both ways.

With that said, i love my DSCR loans outside of slightly higher closing cost. The process is seamless compared to typical government loans. Personally, i always do 30 yr fixed loans, i don't mess with ARM's. I want to know my payment is fixed for the foreseeable future and can adjust accordingly if needed.