All Forum Posts by: Weston O'Dell

 Michael, was this a recent purchase or one you have had for a while?

Hey Peter, what kind of property are you looking to refinance?

Hey Aaron, just sent you a connection!

Hey Aaron, sounds like you are looking for a refi/rehab loan. Generally we structure these as 12 month interest only loans that consist of an initial advance and rehab holdback funded. Personal income/employment will not be underwritten as we are looking at cost to date and ARV. Let me know if you have any questions as I'd be happy to answer.

Hey Deb, great question. VT can be tough from a licensing perspective so be sure to double check with you broker/lender to make sure they are good to proceed. I like the idea as mentioned above that local banks may be a good fit for you due to the potential rural nature of the property. Best of luck and let us know how you proceed!

Yocheved, all great advice here. Generally in this situation we see borrowers close in an LLC with the guarantor having at least 80% ownership and any non-guarantor owner/member having <20% ownership to avoid being underwritten. Just have the conversation with you lender/broker upfront and you should be fine.

Juan, I have the conversation daily with my clients and there definitely is not a perfect answer. The future is unpredictable but a few small adjustments on DSCR loans can really make a difference. Sounds like you have a couple of good options (in-line w/ market) in front of you. I'd ask your broker to also review a 3/2/1 ppp. This is the most popular structuring we are doing currently. Generally, this only is adjusting rate .10-.25bps depending on the deal with no additional loan cost. Less punitive and shorter then the 54321, seems to be a nice balance. Let us know which route you end up locking in!

Shawn, all valid and good options mentioned above. One additional structure would be to cross-collateralize your future purchase with your existing property. Essentially you would have a lien on your current property for the "equity" needed on the purchase deal. This would only be a short-term (12-24 month) loan but is a great option for those value-add scenarios. Let us know which route you end up going with!

Hey Yaniv,

With the current rents around $9k, you'll have to put down a fairly significant down payment for this to fit into a DSCR loan box. Just roughly, I'd estimate 30%-40% down to get the loan to the minimum DSCR requirement. Current DSCR rates for 5+ units are going to be higher than 8% (although bond yields have slid the past couple days, so fingers crossed) and will need in-place rents to meet at least a 1.0x DSCR. Another consideration would be prepayment penalty associated with term debt. I can't speak to the specific cap in the area, but sounds like the asking price might be a little steep. I'd underwrite conservatively and pencil it out with a 12-24 month bridge product that offered both an initial advance, a fully funded capex budget, and no prepayment penalty. Best of luck here!

Hey Alex, looks like you are in a great position overall! Really it comes down to where you want to be long term. If your goal is to scale a rental portfolio then I'd say sell the property and start to BRRRR. You could consider a refinance or pulling a HELOC on the property although this would most likely eat up the $300/mos cash flow you have when moving leverage up. I'm all for holding on to assets but having strong liquidity during the BRRRR process really can help make things less stressful. If you were to use fix & flip funding when acquiring future deals, you'll be able to keep a healthy amount of cash in your pocket and do multiple deals at a time. Best of luck and let us know which route you choose to go!