All Forum Posts by: Burt L.

Clarification- the reference to cost is the quoted cost of annual landlord polices and not the costs to purchase or fix any of the properties. I didn't mean to confuse the matter as insurance is already more than complicated enough!

HI BP - There is another very similar property nearby that has hazard insurance and cost less than half as much despite being larger, but is 15 years newer. The one I"m trying to get coverage on is a 60 year old brick building. I've tried State Farm who has the other and Farmers and they're over double the cost of the property that is 45  years old. 

Who is writing policies that are competitive in the Colorado market? State Farm and Farmers both admitted they "weren't competitive", which was interesting to hear coming from insurers themselves. 

thank you. 

I have been looking at doing a DSCR loan but looks like I'm giving up on that as DSCR loans require bank statements anyway and if I'm going to provide that, I might as well go Conventional and have significant rate savings.

I can obtain a co-signor/Guarantor and make changes to the Operating Agreement as need to be to satisfy a lender as has been suggested as an OA is not a recorded document anyway. 

What are some Conventional lenders that will close in an LLC? There are apparently Conventional lenders that do it commonly, even though its not their first choice. A believe a person has to sign a personal guarantee anyway, regardless of whether a DSCR/Non QM or Conventional. In this market it seems I might as well obtain the rate savings.

I certainly appreciate the replies. Each few years when I wade into the mortgage markets it is dramatically different and it helps so much to hear from those in the business on a daily basis. 

Each of the lenders I've spoken to say these are 'tumultuous times" or very similar language. Not the ideal time to be loan shopping but still being in a rehab loan is even worse and has a definite end-point. A home run deal at purchase with those now-deceased rates has dropped to a double- not even a stand-up double but a headfirst slide being required. 

It seems the thread has taken a turn that I don't understand and didn't intend. 

When I say that the cash I get to take out at the time of refi covers the required 6 months reserves a couple of times over - 6 mos reserves is approx $30K and I can easily take cash out $100K on appraised ARV value of $1.0 M on total rehab loan/purchase loan of $540K at 70% LTV. All the lenders I have spoken to so far have said I can use the cash out for the 6 months reserves. I am more asking about having little other funds left and the same DSCR lenders to date have all wanted to have bank statements despite being a property based loan with a 705 FICO mid-score; good, not great.

That is more my question- am I DOA because of little other cash on hand and what else are they seeking to find on the bank statements? I really thought a lack of financial documents is why people use DSCR loans in the first place.

Thank you for the lender-based info. 

My reserves are to come from the cash-out part of the refi and will well-exceed the amounts required. I have sufficient trade lines as well but little cash on hand as funds are tied up in the deal due to unexpected rehab costs outside the rehab loan. 

Is that what a DSCR lender is really looking for on my bank statements? I will probably be down to a few thousand by closing to get my cash-out returned, and the monthly income from the property. Is that a show-stopper?

In seeking a DSCR cash-out loan, I've learned that lenders want to see bank statements. I had thought DSCR's were only property based, but lenders I've just begun to contact are saying I need to provide bank statements. I asked why and was told that they are just needed to see that I don't have NSF on my statements. I didn't fall off a turnip truck just last night and strongly suspect there is more to it.

This has been a long rehab and I"ve seen interest rates essentially double. My DCR has fallen from 1.7 to 1.25 in the process. At a closing as it is, I will still have approx $350K in equity with taking $100K in cash back.

My cash position has been squeezed as the scope of work expanded, reducing cash on hand. I"m told that I can use the cash-out proceeds for my 6 months escrow, which would be covered a few times over. 

I"m thin on cash on bank statements from the rehab. What is a potential lender really looking for- and how much is low cash on hand going to hurt my lendability despite my equity/cash-out? I've got alot of personal funds  tied up in this property, even with a rehab loan. 

I really didn't think bank statements were a part of a DSCR loan, but it appears I'm dead wrong on this.

Thank you. 

I've been in a long haul on a smaller multi-family rehab and watched the rates almost double. 

I still have a 1.2 DSCR as it was a strong buy but am finishing with very little monies in the pocket. I will have $350K+ in equity with taking $100K or so in cash-out at close. I"m finishing the project with very little left and lenders still want to see bank statements even though the loan is property-based. I"m told I can use the proceeds of the refi as my 6 months reserves.

What will lenders be looking for in my bank statements. A potential lender said they are just looking to see that there are no NSF checks written but I didn't fall off a turnip truck yesterday. What are they more likely looking for?

I've had to increase the scope of the work and decrease the finances to do so. I didn't think that bank statements were needed on DSCR's at all but it appears that I'm incorrect.

Many thanks for your input. 

I"ve been shopping a DSCR and hearing odd things about rate locks.

So far I've been told things such as  I can lock "when I"m close to closing" or "after the appraisal is completed". The appraisal is supposed to be the slowest part of the process. 

I'm sure rates will not be down from those quoted up-front. Years ago I saw a line item on one of my settlement statements for a Yield Spread Premium, which I don't believe are legal anymore. There wasn't much question what had happned there. 

How can I get the actual rate I'm quoted at the time of commiting to the loan?

Thank you BP nation. 

To get a better rate on a DSCR loan, a borrower is supposed to have at least a 700 Credit Rating. My mid-score is a 703 which puts me on the edge and in the higher rate environment anyone would like to at least minimize the interest rate as best as can be done.

My concern is that just by loan shopping I'll drop below 700 due to the credit inquiries. I've read here that using a mortgage broker results in only one credit pull but just who is a reliable, wide-ranging loan broker of the newer DSCR loans has proven elusive. There are supposed to be 10-12 large national DSCR lenders, but those have also been hard to identify.

 I'm sure credit also gets pulled again, just before closing. How can I avoid dropping into the higher interest rate range just by the act of loan shopping, itself?