All Forum Posts by: Wilson Manigat

@Basit Siddiqi thanks for the response! I totally agree that selling it is probably the best option. But what I'm running into is that most people don't want to buy a renovated property with a tenant in it. Even at a deeply discounted price. If you know where I could find that group of individuals I'd love to hear your thoughts. I've tried placing on the market, doing a JV with wholesalers, you name it.

Hi @Marci Mayes, thank you for your response. The loan is at 400k and the property appraised at 530k. I did receive approval for a conventional loan at the rate of a little over 3700/mo. At 8 percent. However, I’m currently paying a little over 3900 at 10 percent with the hard money lender. It just seems like a huge loss to accept that loan and I’m practically paying the same amount.

Hi there,

Me again. I could really use some insightful advice. I've posted slightly about this before but I am running into a wall and would love to see what my options are. I purchased a property in Houston TX in December of 2022 for a loan amount of roughly 400k. I had that property renovated with the intent of flipping initially but then the market flipped on me. The federal interests rates kept climbing what seemed to be weekly thus creating fear in the market to purchase. So I decided that if the initial exit strategy of flipping wouldn't work I would try and rent it out. You know, do the long hold game. However, I was unable to get any bites on renters near the one percent because although the area is great and progressive, 3900 for rent just wasn't feasible. I eventually had to settle for $2900, which is still about $500 more than the market average. 

I've tried going the DSCR route to refinance and was told that I didn't meet that 1% rule. So I was told that I'd have to wait until the property seasoned for six months to get an interest only or conventional loan. Fine. However, after 4 months of losses I finally attempted those loan options, only to be give high rates and a monthly payment that practically mimicked the current price that I was paying now for the hard money loan. Being that it's hundreds of dollars being lost every month, that made no sense to take on. So I decided to sell the property below market rate, leaving between 70-90k of equity on the table because I just need to stop the bleeding but I haven't been able to get any bites.

Any ideas on what I can do next? And I know there may be some that will post that I'm screwed, cool. Thank you. But for those of you who may have an outside of the box idea that I could use to really help me in this situation, I would truly and greatly appreciate your thoughts!

@Luka Milicevic You are right. It is definitely a situation in which it isn’t really favorable. Glad to hear you found terms. I am still just trying to break even here myself by finding a lender that will cover the combined loan (purchase and rehab) it is practically impossible. I’m hoping something comes through soon because, as you’ve stated, those interest rates are a killer. Thanks for the thorough response!

You're right! As an investor I've normally been one to just do fix and flips. Considering how the market is correcting and not many people are buying as they were before, buying and holding seemed like the better strategy. However, as you stated, BRRRR seems to be subpar at best. So I am trying to figure how does an individual manage in general. Even with trying to sell off a property, it doesn't seem like you're going to get top dollar for it so it seems like you'd be stuck any way you try.

@Jonathan Taylor, you are correct and thank you for the clarification. With the DSCR loan, I've yet to run into a lender that provides enough to cover total loan (purchase + rehab). Not saying they don't exists, but my experience as of late has been that DSCR loans cover a percentage of LTV rather than ARV. Example is if you purchased a home 300k, regardless of rehab, you're getting 70-75% (or less) of the 300k. Not ARV which could essentially cover the entire note. Is that not the case for your company?

Hello BP Buddies,

I know the common answer to the question would be, "well, it depends...", but I am truly curious. No need for snarky remarks, just trying to create a think tank here. As an investor, if you purchase a home using hard money where the rates are extremely high already and you rehab the property, how do you manage the refinance portion? With the recent changes in lending rules, it's almost impossible to get out what you put into the property. You can't Cash-out refinance until a year later now. Getting an investment HELOC (depending on location) is practically non-existent. So with that being stated, what strategies are you using to get your money out to pay those debts? How are you getting the full value out of the house until you are able to cash-out refinance 12 months down the line? Where is the upside to get you into the next property?

I know we have to adapt to changes so I'd love to hear what you all are doing?

 Thanks for the response Cody, I agree. Holding in this market with these rates just isn't the best move right now it seems.

Hi Timothy,

The DSCR rates were quoted at about 7%. However, DSCR loans are also based on the rental income generated. The average rental rate in the area is way lower than what I'd be required to payout monthly to the lender. This would unfortunately disqualify me before I even get started.

 Thanks Marco! That is probably the realest response I could've gotten. It sucks but I do have to just accept the fact that selling is more than likely the only option here. It's better to fail forward than to not have tried at all. It's definitely a lesson learned but I won't give up on the Houston market. I'll definitely be reaching out to you for sure. Thanks again for taking the time to respond!