All Forum Posts by: Tanner Lewis

Was this for a rehab on a flip? I suggest going with hard money since that product is more made for rehabs than an institutional bank. Most draw requests are filled in 2 days, but this varies depending on the lender. 

A lot of investor-friendly agents will give you first dibs on a property before they bring it to the MLS; it is a great way to get deals off the market. I know this happens a lot in Texas.

Quote from @Mikal MAxim:

Hi, and thanks in advanced for your advice. We moved 4 years ago to a new home and kept our previous home as a rental. It has been rented out the past (4) years and has good equity. I would like to get cash out, but unsure of whats the best route. I understand the Cash-out Refinance, but just recently heard about DSCR Loans. Im in a suburb of Houston (Richmond, TX) and wondering what would be the best route to get cash out of the property? Mortgage remaining is around 85K and current value based on comps is right around 295k. Also the property rents for 2K and has good cash flow.

Hey Mikal - that deal would be pretty easily done as a DSCR but the main reason you would want to go that route is if you want to 1) put title in an LLC for asset protection 2) qualify off the property's income and not your personal DTI 3) keep this mortgage off your personal record so you can qualify for another conventional loan down the road

By my understanding, Fannie/Freddie requires that you "intend" to live in the property for one year. If a major life event occurs, such as your company closing, forcing you to relocate, then you are not violating the closing documents by relocating to another area with ample job opportunities. I would chat with a conventional lender to verify, as I mainly just do DSCR/hard money.

If you refinance this, you would likely be looking at 75% LTV, which would be below a lot of lender's loan amounts and make this very difficult to leverage. I suggest selling this deal and 1031 exchanging into a larger deal, it would be a lot easier to finance, and you would get better rates on it. If you were to 1031 and walk away with $100k in escrow, you would be able to purchase a $500k deal with a DSCR loan.

Quote from @Anthony Lowe:

Hi all, looking for advice on a few different topics. I am new to real estate investing (i've never invested, but have decided that this is something that I want to be a part of and have begun learning and doing research on). Initially, I have been the most interested in either single family long term rentals, or STR's. I'm looking into starting my journey within the next 1-2 years. 

In regards to the STR, I live about an hour away from mountain town markets in Western NC, and would love to start my STR investment here if the numbers make sense. I've been doing all of my initial research of the markets through AirDNA. I have been most attracted to the idea of buying undeveloped land and building a 1-2 bedroom cabin on it to turn into the STR. My upfront capital I currently have to invest is $20,000, but from what I am gathering, this will not nearly be enough and lll need to save a lot more, and the main reason why I have given myself a timeline of the next 1-2 years to make the leap into investing. The financing options I have seen that make the most sense are Construction to Permanent Loans, but researching all of the different loan options has my head spinning. Is this too much to take on for a first time investor? Am I being overly ambitious with my initial goals? Any general advice here wold be greatly appreciated.

Also, any advice on how to find a mentor that I can learn from as I begin this journey?

Thank you all in advance!

Hey Anthony - as a first-time investor, I would avoid construction and buy something turnkey. It will be difficult to get financing as a first-time builder already, and even more difficult when trying to do a ground-up build in a rural market like the Smokey Mountains. Additionally, cabins are very difficult to refinance if built improperly. 

If you are looking at a STR deal in the Smokeys, I suggest using a DSCR loan to buy something turnkey and just qualify with AirDNA projected income. The only lenders that can use AirDNA for rural STRs will require 30% down, so I would suggest either partnering with someone or saving up more for a down payment. 

Just toss all the interior items - it is not worth the time and opportunity cost. If you decide to reno, just make sure the ARV would be enough to justify the rehab cost.

Always go conservative with your estimates, but I would look at the individual rental comps to see what is a more similar comparison. Similar reno/location will be more accurate as Zillow/BP/Rentometer all pull similar bed/bath comps in the market and don't account for the fine details. 

In my opinion, it is better to buy now while there is less demand and then refinance once rates drop. 

Hey Chris - it depends on what your goals are. Colombus OH will see more cash flow, but Mount Shasta will be more of an appreciation play with a greater overall return. I suggest making a cash flow play for your first investment, but if you have a high income already, it may make sense to aim for appreciation.