All Forum Posts by: Steven Goldman

Kyle no worries you will qualify for either permanent financing or bridge loan, fix and flip. The fix and flip money will run around 11.99 percent and costs. The permanent financing can be in the high 5s or low 6s for thirty year fixed. Rates are rising so now is the time to jump in as every month the rates will rise until inflation is under control.

Debt service coverage lending only is concerned with your credit score (the ratio of rental income to total mortgage payment) and, 6 months of savings in some type of investment account.  Fix and flip money is only dependent on the viability of the project, your experience  and  credit score.  No bankruptcies or major credit events in the past 3 years. 

You will need around 20 percent of the loan amount to close on a fix and flip. You will need 20 percent down and the closing costs for permanent financing. I hope that answers some of your questions. 

Good luck.

Portfolio lenders do not like multiple small value properties. This makes the project challenging. A real estate bank would be interested if you have a high enough credit score, independent w2 or 1099 income and a low enough D.T.I. The problem is you are running out of time. 

In order to analyze your options a lender would need to know more about your personal finances. The best bet is to find a local private lender. As has been already pointed out your cash flow is low for that number of units. So they may not support a debt service coverage loan. I think you may need to take in a j.v. partner to make this work. Where are  the properties and what is each properties value? What is your occupancy rate? D.M. me for more info. 

One of the impediments to investing in distressed areas is the financing limitations. Many funding companies have restrictions on areas that are blighted or have high crime statistics. You should always run your prospects past your financing team mate to make sure you will not have trouble with financing or refinancing. Good luck.

Each State has their own laws regarding the escrowing of security deposits. @JackWiley is correct that best practice is to escrow your security deposits in a interest bearing account. While it is customary for security deposits to transfer  when you are buying an occupied residential property, your contract should state that the seller will transfer all security deposits at time of settlement. Good luck!

You replace your half. The roofer knows the drill. If you can work with the other owner to do both, it will result in a discount on the job and make for better curb appeal. Good luck,

@Andrew C. No they are not. Many realtors I know have 20 or more doors in that configuration as they are cash cows.

Short not all inclusive summary of regulations:

You need a Zoning Permit for limited lodging to rent your home for up to 30 consecutive days to any one person or group.(This is about taxes)

You need a Zoning Permit for Visitor Accommodation:

• To rent your home for stays of 30 days or fewer.
• If the property is not your primary residence.

Housing requirements

• Smoke alarms must be installed:
  • In each bedroom.
  • In the hallway in the immediate vicinity of the bedrooms.
  • On each floor of the home, including basements.
• Carbon monoxide alarms must be installed:
  • Within 15 ft. of the entrance to every bedroom or within 15 ft. of a bed in sleeping areas if there isn’t an enclosed bedroom.
  • Centrally on a wall or the ceiling, but not directly in front of a door to a bathroom or within 5 ft. of a cooking appliance.
  • Under the installation requirements for smoke alarms if they are combination smoke and carbon monoxide alarms.
• You can’t post signs for lodging on your home.
• The home can’t be occupied by more than three people (including the owner and renters) who aren’t related by blood, marriage, life partnership, adoption, or foster-child status.
• You cannot change your house so that it no longer resembles a private residence.

Information you must provide your renters

• Renters are only allowed to have guests between the hours of 8 a.m. and midnight.
• You must tell renters the trash and recycling collection days and any trash disposal rules and regulations. You must provide proper trash containers for renters.
• Excessive noise is prohibited and violators are subject to fines and penalties.
• The owner or their designee must provide contact information to the renters. The contact person must handle any complaints from the renters.

It is not that onerous and the licensing procedures are available on line.

I always recommend that you speak with a accomplished realtor in the area who deals in short term rental properties. DM me if you want a recommendation.

Financing is always challenging are you looking for a JV partner or a funding company. Funding companies can give you deal specific bridge financing including 100 percent of the construction costs and 85 percent of the purchase price. You still need sufficient capital to cover the down payment, closing and loan costs.

@Naftali Green   dm me and I can make a suggestion. 

I highly recommend that you reach out to both a fix and flip lender and a debt service coverage lender prior to signing an agreement of sale. The project only works if your financing works. In our experience we would rather know about the deal prior to it being submitted to us to  insure that the deal makes sense from a financing standpoint. Often sellers want a pre-qual or pre-approval prior to showing the property. So if you are house hacking you will have a pre-approval from a GSE lender. If you are investing, Fix and flip or funding companies analyze each deal based on its metrics. So you are far better off with having that information in your pocket before you make an offer on a specific property. Your lender should be able to evaluate your deal within a few hours and let you know if it works. I hope that helps.