All Forum Posts by: Stevan Stojakovic

You could focus on entering smaller or less competitive markets where your capital goes further, such as investing in affordable multifamily properties or cash-flowing rentals out of state. Those markets offer affordable entry points into duplexes or single-family rentals that can generate positive cash flow.

Also, creative financing can be your best friend.

Best regards, Stevan

Quote from @Steven Stanimirovic:

Hi Rich,

The prepayment penalties you've encountered are quite standard with DSCR loans, as lenders often structure these penalties (commonly called "step-down prepayment penalties") to offset the risk of early loan payoff. The 5-4-3-2-1 structure you mentioned is among the most common. However, there are lenders who offer more flexible terms or even no prepayment penalties, depending on the deal structure and your investment strategy.

To find such lenders, here are some options to consider:

1. No Prepayment Penalty Loans: Some lenders, often private or portfolio-based, offer DSCR loans without prepayment penalties, though the trade-off might be a slightly higher interest rate or fees.
2. Yield Maintenance or Defeasance Alternatives: Ask about other prepayment structures like yield maintenance, which can sometimes be less restrictive depending on market conditions.
3. Custom Terms: There are lenders (like us at Phoenix Funded) who can structure loans tailored to your needs. For example, we might arrange a shorter penalty period or reduced fees if you expect to exit the property within a specific timeframe.

Ultimately, the key is aligning your financing terms with your exit strategy. If you anticipate selling the property soon, it’s worth negotiating or shopping around for a lender with flexibility in prepayment penalties.

Feel free to reach out if you'd like to explore tailored DSCR options that suit your goals. I'd be happy to help you navigate this!

Steven, you've brought up an excellent point about the trade-off between prepayment penalties and interest rates in DSCR loans. It's a nuanced topic that often depends on the investor's strategy and exit plan for the property. For someone focused on quick flips or shorter holding periods, paying a slightly higher rate for flexibility might make more sense. However, if the property is a long-term hold, the lower interest rate with a prepayment penalty can often result in better overall returns.

Another consideration investors should evaluate is how prepayment penalties are structured - whether it's a declining penalty over time or a flat fee - because this can significantly impact their profitability when selling earlier than expected. It’s crucial to run the numbers and consult with a lender who can tailor solutions based on the specific investment goals.

Best regards, Stevan

When thinking about using a 401(k) loan for real estate, view it not just as an access point for funds, but as a strategic part of your overall financial plan. While it’s tempting to see the low-interest, self-repayment setup as a win, the key question to ask is whether the opportunity cost justifies the move. You’re pulling money from a long-term compounding vehicle to fund a potentially higher-risk asset. Can your real estate investment outperform the long-term returns of your 401(k), net of taxes and penalties if something goes sideways?

Another angle to consider is liquidity and flexibility. Real estate investing often demands reserves for unforeseen expenses. Using a 401(k) loan reduces your emergency liquidity, which could make the investment riskier if unexpected costs arise. Instead of tying up your retirement funds, tapping into financing specifically designed for real estate investors can keep your portfolio diversified and your retirement intact.

Leveraging your 401(k) is your personal decision, but framing it within the broader context of balancing risk, liquidity, and opportunity cost can clarify whether it’s the best tool for your goals.

Best regards, Stevan

A few tips: maintain a solid credit score, organize your financials (especially your proof of funds), and be ready to show that you have a solid plan for your investments. Additionally, make sure the deal itself is strong.

Best regards, Stevan

We tried to discover how changes in federal grants and funding during the Trump administration can open new doors for real estate investors. At the end, we made this video which explores critical shifts in housing, education, and community development funding, providing actionable strategies to align your investments with emerging opportunities.

How state-level decision-making can and will impact property values? Where to find high-demand areas, and how to navigate shifts in affordable housing and career training programs? Whether you're flipping houses, building rentals, or seeking long-term growth, this video could be helpful.

The Future of Real Estate Grants Under Trump

Have questions or need personalized guidance? Connect with us at [email protected] or visit http://phoenixfunded.com to explore your funding options.

Don’t miss this chance to level up your real estate game! #RealEstateInvesting #GrantsAndFunding #PhoenixFunded

Quote from @Steven Stanimirovic:

Lastly, start small with your first project, ideally in a neighborhood where you understand the market dynamics. This minimizes risk and lets you build confidence as you gain more experience. If you need advice or help with financing as you grow in this venture, feel free to reach out anytime. Good luck! I’m excited for your journey!

Great points—focus on networking, understanding your numbers, and starting with a manageable project. To add, leveraging fix-and-flip or BRRRR-specific financing can help you scale faster without overextending your personal funds. Know your market, stay disciplined with budgets, and build confidence with each deal.

Best regards, Stevan

If your goal is cash flow, focus on rental properties in high-yield markets like the Midwest or Southeast. For appreciation, target areas with strong job and population growth. A BRRRR strategy or house hacking with a duplex can maximize your returns.

Consider leveraging financing to acquire multiple properties, which spreads risk and scales your portfolio faster. Short-term rentals in tourist-heavy areas can also outperform traditional rentals. If passive investing appeals to you, real estate syndications or REITs diversify exposure without active management.

Best regards, Stevan

While it's a useful guide, flexibility is key adjusting to 75-80% ARV minus rehab costs might make deals work without sacrificing profitability. Focus on setting a clear minimum profit threshold (e.g., $20K-$30K or 10-15% of ARV) to ensure your efforts are worthwhile. Let mw know if you need help with financing. Thanks, Stevan

Hi Rod, The local bank's $200K cash-out refi at 6.875% isn't perfect but clears your HELOC/mortgage, provides scaling capital, and leads to a commercial loan for 5+ properties, solving your DTI issue and unlocking a line of credit for future growth. Accepting this deal aligns with your goals of scaling sustainably. Consider DSCR loans, portfolio loans, or seller financing as complementary options for acquisitions. If structured well, this strategy will position you for rapid expansion. Let me know if you need help optimizing financing.

Best regards,
Stevan

Starting out in a high-cost-of-living area can be challenging, but it also presents unique opportunities if approached strategically. Focus on value-add properties where improvements like renovations or better management can increase returns. Consider creative approaches like short-term rentals, ADUs, or co-living spaces that maximize income in limited spaces. Partnering with experienced investors can also lower your risk while allowing you to learn and contribute.

If affordability is an issue, co-buying, rent-to-own agreements, or leveraging sweat equity in fixer-uppers can help you get started. Don’t overlook the power of networking—off-market deals often come from local connections, landlords, or investor meetups. Finally, remember that real estate in HCOL areas is often about long-term appreciation rather than immediate cash flow. Strategic patience pays off.

Good luck, and keep building your knowledge and network—you’ll find your way forward!