All Forum Posts by: Tyler Warrick

@Earl Morris Great questions! It all depends on your goals and what is important to you. Admittedly, I am not the best to answer this question (lender here). However, I have two types of clients that relate to this scenario: 1) The client who is over protective, and puts each one of their rental properties into its own LLC/Trust and 2) The client is who focused on simplicity, and puts all rental properties under the same umbrella.

Neither one is right or wrong, it just depends on what is important to you. I'm not quite certain what a Real Estate Attorney's responsibilities are in relation to this, but I would highly suggest reaching out to estate planners. I am connected with some high level/complex estate planners in Texas, as well as affordable estate planners in Texas.

Assuming the $250k is what you have for down payment and you can finance the conversion/ADU on your own a Conventional loan would be ideal if you have a +700 credit score. If you have a sub 700 credit score I would consider FHA.

Rather if the $250k is your total to invest (down payment + renovation costs) then I would look at FHA loans as they offer lower rates (yes they have mortgage insurance no matter how much equity you have) and the overall payment is likely to be lower even with mortgage insurance.

Feel free to DM me if you have specifics/want to see rates. I can give you a ballpark without pulling credit.

 I have 7 that I can go through. What type of financing are you looking for/what does the deal look like? I know you mentioned office builds, strip malls and owner occupied SBA Loans. Additionally where are you looking (state)?

 I'm just teasing you, brother. Gotta find some laughs on a Friday! Have you considered my post reply above yours? It's not for everyone, but definitely a different way to look at the money. 

 Sounds like an agency guy to me ;)

@Gustavo Alvarez Great question and yes this is normal. DSCR loans can range from 0-5 year PPP. The higher the PPP the better the rate and vice versa.

I might be giving away a huge tip for other lenders, but this is my thought process when I purchase investment properties: I focus on cash flow, but only buy properties in areas that will appreciate (secondary goal for me). If a property appreciates at least 2-2.5% per year, I know that my PPP is essentially paid for if/when I refinance/sell. 

How does this work? Most PPP are either 6 months of interest (typically on 80% of the original note balance), or 1/2/3/4/5% of the balance that is prepaid. When you factor it all out, it's about 2-2.5% of the property's value. So if appreciation is +2.5% then the market just paid for my PPP.

@Tianyi Chen great work! Assuming you don't have 10+ financed properties, an "All in One" loan might be a serious contender for you. It's essentially a first position HELOC. With close to $2M in equity across 12 properties, I would assume you cash flow like crazy. This could be a ridiculously good option to have access to quick cash and wouldn't hurt your cash flow.

Feel free to DM/reply for more info. I'm sure others would like to see the details :) 

@Ray Hage is a great resource for properties in FL. He raises private money. Might be worth reaching out to him.

Great question! In order for us to accurately answer/direct you to a loan product will require more information. 

What are your intentions with the property (will you occupy it from the start? Do you plan on doing these improvements before anyone moves in? Timeline?)? What is your budget? How much do you plan on putting down?

There are hundreds of ways to structure a loan, and we need a few more inputs to be able to guide you in the right direction. 

Hey @Brandon Jensen great questions. I'm a mortgage broker and have lenders who won't even look at credit scores for Hard Money. That being said, what is most important to you? Rate or Cost? I have lenders who charge no points (you'll accept a higher rate), and lenders who can offer lower rates (you'll pay points). 

In my experience, my investors who expect to get in/out of the deal quickly don't look at rate as they'll be in a deal for 2-4 months and the benefit of no up front costs saved by paying no points far outweighs the difference in monthly payment from the higher rate. 

However, if you expect to be in a deal for longer, you'll want to do a cost/benefit analysis on your breakeven point.