All Forum Posts by: Steven Goldman

Quote from @Dana Powell:

Quote from @Steven Goldman:

The best DSCR lenders are national. Rates have just increased so it is important to get going as they are projected to increase steadily over the next few months. DSCR lenders have minimum loan amounts and also property values so you will need to find the right lender for your particular project. The rate will be governed by credit score, D.S.C.R. and loan amount. Smaller loans cost more.

 @Steven Goldman, I'm being quoted 6% with 3 points on a DSCR 10-year IO/20-year P&I. Last month I settled a similar property at 4% with 3.5 points on a 40 year DSCR with 10 year IO period! Do you think these rate increases are here to stay or will they come down after a few months? I'm just getting into DSCR loans and looks like my timing is well, not good! I'm in DC; I don't think sale prices will soften with these rate increases.

@Dana Powell: It is safe to predict that debt service coverage rates will continue to increase as the Federal Reserve raises their rates. Rents are also rising to historic levels. If rents continue to rise than higher debt service coverage interest rates will not be as challenging. I have been in real estate since 1983. Periodically rates have risen and the savvy investors have always remained in the market, thrived and survived.

As you move forward you will find private money to fund your deals.

The new environment will require more creative thinking. Usually that is the opportunity for the most success. The new rate and price reality will wash out those who are not able to evolve and think on their feet. Those who remain will have a much less crowded field to compete with.  Do not quit work harder and smarter!  

As an aside, before 2008 many people  adhered to this simple axiom: "Real estate will never lose value because they are not making any more of it". In fact that is not true as many learned the harsh reality in the great recession. I do not believe a great recession is coming. However, what goes up will eventually come down to earth. So position yourself with sufficient capital reserves to withstand a reduction of values, or income, as at  some point it is inevitable. Many of the savviest investors sold their holdings just prior to 2008 and then bought back in after the market decline. Just keep your eyes open and do not be afraid to act when the lights are flashing.

As Deniro said in Heat: 
"Don't let yourself get attached to anything you are not willing to walk out on in 30 seconds flat if you feel the heat around the corner."   Neil Mcauley

Quote from @Ronak Bajari:

@Steven Goldman

Thanks for the response. How do I find a GSA loan agent

Any reputable mortgage company will have FHA fannie or freddie products.

The best DSCR lenders are national. Rates have just increased so it is important to get going as they are projected to increase steadily over the next few months. DSCR lenders have minimum loan amounts and also property values so you will need to find the right lender for your particular project. The rate will be governed by credit score, D.S.C.R. and loan amount. Smaller loans cost more.

Well that depends on the rate on your residence. Investment mortgages are generally at a higher interest rate than a owner occupied primary residence first mortgage. Many investors hack their properties to get a FHA or other GSA loan and then later rent out the property and buy another primary residence. If you are buying a declared investment property you are likely to have a lower L.T.V. and a higher interest rate. Good luck, I hopethat helped.

Elaina, I wish you only success in your short term rental program in Columbus. Over the years of investing and practicing in various aspects of real estate I have learned that forming a strong team including, realtors, wholesalers, financiers, investors and property managers, is essential to the success of any real estate enterprise. The direct financing of short term rentals is developing and their are various lenders who will lend on a new STR based on Air DNA data. If you are purchasing an existing STR they will use the historic income.

Many of our most seasoned borrowers have built a team of J.V. private investors to be able to muster more down money allowing them to increase the number of S.T.R. deals they can do simultaneously. 

We have extensive relationships in Columbus and greater Ohio and love the marketplace. Good luck!

May I ask you to share how you acquired a $323,000.00 property with less than 5 percent down? I think that would be of great interest to the members. Does that include transfer ax and title fees? Philadelphia's transfer tax is 4 percent total. Customarily divided between the buyer and the seller. Two percent of the transfer tax is $6460.00. Is that included in your $17,000.00? 

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.