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Justin Pumpr
  • Oakland, CA
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Commercial, Portfolio, DSCR, or Private Lender

Justin Pumpr
  • Oakland, CA
Posted Mar 27 2023, 09:41

Hey all,

I'm looking for some advice on which type of lender to use and then looking for referrals for that type of lender in the Columbus area. Some background:

I own a few properties in Columbus and Dayton, OH (a mix of SFR and small MFRs) all of which are financed using traditional Fannie/Freddie lenders. I'm getting close to my 10 loan limit and would also like to work with someone who is more investor friendly and hopefully is less hassle and still has good rates. I currently have a duplex that I'm BRRR-ing and looking to refi in a couple of months. I also want to buy another 20+ units this year, ideally as one building, but it may be split over a couple depending on the deal. I'm looking to cash-out-refi on these too expecting to only get 70% LTV (although if I could get 75% LTV that'd be great). All my properties are cash flow positive and my FICO fluctuates between the high 700s and low 800s.


I'd like to find a lender who can facilitate all my new properties. So my question is, when considering these types of lenders, Commercial, Portfolio, DSCR, or Private which type of lender would be best suited for scaling my portfolio?

Cheers,
Justin

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    Timothy Hero
    Pro Member
    • Lender
    • United States
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    Timothy Hero
    Pro Member
    • Lender
    • United States
    Replied Mar 27 2023, 10:09

    Refi the current portfolio with DSCR loans. Get those off your credit. It will be a higher rate than what you have I assume, but Ohio cash flows well.

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    Eugene Neal
    • Lender
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    Eugene Neal
    • Lender
    Replied Mar 27 2023, 10:32
    Quote from @Justin Pumpr:

    Hey all,

    I'm looking for some advice on which type of lender to use and then looking for referrals for that type of lender in the Columbus area. Some background:

    I own a few properties in Columbus and Dayton, OH (a mix of SFR and small MFRs) all of which are financed using traditional Fannie/Freddie lenders. I'm getting close to my 10 loan limit and would also like to work with someone who is more investor friendly and hopefully is less hassle and still has good rates. I currently have a duplex that I'm BRRR-ing and looking to refi in a couple of months. I also want to buy another 20+ units this year, ideally as one building, but it may be split over a couple depending on the deal. I'm looking to cash-out-refi on these too expecting to only get 70% LTV (although if I could get 75% LTV that'd be great). All my properties are cash flow positive and my FICO fluctuates between the high 700s and low 800s.


    I'd like to find a lender who can facilitate all my new properties. So my question is, when considering these types of lenders, Commercial, Portfolio, DSCR, or Private which type of lender would be best suited for scaling my portfolio?

    Cheers,
    Justin

      As us being a direct lender and currently working with many other that are looking to do the same, we wouldn't have an issue with helping you continue your journey. Due to your experience you would only need to place 10% down on properties your are looking to purchase. As far as refi LTV, we may be able to go up to 80% depending upon the situation. Please reach out if ready to discuss the next steps.

      1. Commercial Lenders: Commercial lenders are traditional lenders such as banks and credit unions that offer loans for commercial real estate investments. They typically offer lower interest rates and longer repayment terms than other types of lenders, but they may have stricter lending requirements and longer application processes.
      2. Portfolio Lenders: Portfolio lenders are lenders who keep the loans they make on their own books instead of selling them to investors or secondary markets. This can give them more flexibility when it comes to loan terms and underwriting criteria, which can be beneficial for investors looking to scale their portfolios quickly.
      3. DSCR Lenders: As mentioned earlier, DSCR lenders focus on the cash flow of the property rather than the borrower's creditworthiness. This can be helpful for investors who have strong cash flow from their properties but may not have a strong credit profile.
      4. Private Lenders: Private lenders are individuals or groups who provide financing for real estate investments. They can offer faster funding and more flexible terms than traditional lenders, but they typically charge higher interest rates.

      Overall, the best lender for scaling your portfolio will depend on your specific investment goals and financial situation. 


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      Justin Pumpr
      • Oakland, CA
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      Justin Pumpr
      • Oakland, CA
      Replied Mar 27 2023, 10:45

      @Timothy Hero I have rates in the high 3s and low 4s on the bulk of my portfolio, so refi-ing doesn't make sense as it'll reduce my cash flow. I have no issue with them being on my credit profile, at least not at the moment anyway. @Eugene Neal so it sounds like a portfolio lender may be my best bet since my credit profile is solid. I'll DM you to see if this makes sense.

      Cheers

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      Timothy Hero
      Pro Member
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      Timothy Hero
      Pro Member
      • Lender
      • United States
      Replied Mar 27 2023, 12:17
      Quote from @Justin Pumpr:

      @Timothy Hero I have rates in the high 3s and low 4s on the bulk of my portfolio, so refi-ing doesn't make sense as it'll reduce my cash flow. I have no issue with them being on my credit profile, at least not at the moment anyway. @Eugene Neal so it sounds like a portfolio lender may be my best bet since my credit profile is solid. I'll DM you to see if this makes sense.

      Cheers


      A DSCR lender is often referred to as a portfolio, so you're going to lose those 3's and 4's. Heck, even conventional is low 7's for investment properties.

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      Stephanie P.
      Pro Member
      #4 Mortgage Brokers & Lenders Contributor
      • Washington, DC Mortgage Lender/Broker
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      Stephanie P.
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      Replied Mar 27 2023, 12:51
      Quote from @Justin Pumpr:

      Hey all,

      I'm looking for some advice on which type of lender to use and then looking for referrals for that type of lender in the Columbus area. Some background:

      I own a few properties in Columbus and Dayton, OH (a mix of SFR and small MFRs) all of which are financed using traditional Fannie/Freddie lenders. I'm getting close to my 10 loan limit and would also like to work with someone who is more investor friendly and hopefully is less hassle and still has good rates. I currently have a duplex that I'm BRRR-ing and looking to refi in a couple of months. I also want to buy another 20+ units this year, ideally as one building, but it may be split over a couple depending on the deal. I'm looking to cash-out-refi on these too expecting to only get 70% LTV (although if I could get 75% LTV that'd be great). All my properties are cash flow positive and my FICO fluctuates between the high 700s and low 800s.


      I'd like to find a lender who can facilitate all my new properties. So my question is, when considering these types of lenders, Commercial, Portfolio, DSCR, or Private which type of lender would be best suited for scaling my portfolio?

      Cheers,
      Justin


        I'd leave the properties you have alone and just start acquiring properties using DSCR loans. The loans in the 3's and 4's may not cash flow with a new loan in the 7's and maybe 8% range.

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        Harrison Chow
        • Real Estate Agent
        • Columbus, OH
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        Harrison Chow
        • Real Estate Agent
        • Columbus, OH
        Replied Mar 27 2023, 23:14
        Quote from @Justin Pumpr:

        Hey all,

        I'm looking for some advice on which type of lender to use and then looking for referrals for that type of lender in the Columbus area. Some background:

        I own a few properties in Columbus and Dayton, OH (a mix of SFR and small MFRs) all of which are financed using traditional Fannie/Freddie lenders. I'm getting close to my 10 loan limit and would also like to work with someone who is more investor friendly and hopefully is less hassle and still has good rates. I currently have a duplex that I'm BRRR-ing and looking to refi in a couple of months. I also want to buy another 20+ units this year, ideally as one building, but it may be split over a couple depending on the deal. I'm looking to cash-out-refi on these too expecting to only get 70% LTV (although if I could get 75% LTV that'd be great). All my properties are cash flow positive and my FICO fluctuates between the high 700s and low 800s.


        I'd like to find a lender who can facilitate all my new properties. So my question is, when considering these types of lenders, Commercial, Portfolio, DSCR, or Private which type of lender would be best suited for scaling my portfolio?

        Cheers,
        Justin


          Hey Justin! Based on your investment goals, it may be beneficial to work with a portfolio lender or a private lender who can offer more flexibility in lending criteria and may be able to offer lower rates. I may be able to provide you with referrals for lenders in the Columbus area who specialize in working with investors and have experience in your specific investment strategy. We can also review your investment goals and help you determine which type of lender is best suited for your needs. Let's connect!

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          Jimmy Lieu
          • Real Estate Agent
          • Columbus, OH
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          Jimmy Lieu
          • Real Estate Agent
          • Columbus, OH
          Replied Mar 28 2023, 08:09
          Quote from @Justin Pumpr:

          Hey all,

          I'm looking for some advice on which type of lender to use and then looking for referrals for that type of lender in the Columbus area. Some background:

          I own a few properties in Columbus and Dayton, OH (a mix of SFR and small MFRs) all of which are financed using traditional Fannie/Freddie lenders. I'm getting close to my 10 loan limit and would also like to work with someone who is more investor friendly and hopefully is less hassle and still has good rates. I currently have a duplex that I'm BRRR-ing and looking to refi in a couple of months. I also want to buy another 20+ units this year, ideally as one building, but it may be split over a couple depending on the deal. I'm looking to cash-out-refi on these too expecting to only get 70% LTV (although if I could get 75% LTV that'd be great). All my properties are cash flow positive and my FICO fluctuates between the high 700s and low 800s.


          I'd like to find a lender who can facilitate all my new properties. So my question is, when considering these types of lenders, Commercial, Portfolio, DSCR, or Private which type of lender would be best suited for scaling my portfolio?

          Cheers,
          Justin

          Hey Justin, I'm a local investor and agent here in Columbus Ohio and have done quite a few BRRRRs and flips and have used everything from HML to DSCR to private money. I have an amazing DSCR and portfolio lender who has no seasoning period that can help with your situation. Also, I'm a huge advocate of using private money - I think when you leverage other people's money, that's how you 10x your real estate business. I've done it many times so far and have helped a lot of clients do the same so if you have any questions or want to connect, always happy to help!

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          Jack Tulloch
          Pro Member
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          • Lender
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          Jack Tulloch
          Pro Member
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          • Lender
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          Replied Mar 28 2023, 11:10

          DSCR is great for scaling your portfolio and there are a lot of options out there in the DSCR space. I'd recommend just talking to a few and finding the best fit. A mortgage broker with access to numerous lenders and loan types may be a good option for you as well.

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          Marc Rice
          • Real Estate Agent
          • Columbus, OH
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          Marc Rice
          • Real Estate Agent
          • Columbus, OH
          Replied Mar 29 2023, 07:03
          Quote from @Justin Pumpr:

          Hey all,

          I'm looking for some advice on which type of lender to use and then looking for referrals for that type of lender in the Columbus area. Some background:

          I own a few properties in Columbus and Dayton, OH (a mix of SFR and small MFRs) all of which are financed using traditional Fannie/Freddie lenders. I'm getting close to my 10 loan limit and would also like to work with someone who is more investor friendly and hopefully is less hassle and still has good rates. I currently have a duplex that I'm BRRR-ing and looking to refi in a couple of months. I also want to buy another 20+ units this year, ideally as one building, but it may be split over a couple depending on the deal. I'm looking to cash-out-refi on these too expecting to only get 70% LTV (although if I could get 75% LTV that'd be great). All my properties are cash flow positive and my FICO fluctuates between the high 700s and low 800s.


          I'd like to find a lender who can facilitate all my new properties. So my question is, when considering these types of lenders, Commercial, Portfolio, DSCR, or Private which type of lender would be best suited for scaling my portfolio?

          Cheers,
          Justin

          I have plenty of lenders who can go commercial or DSCR. Commercial will probably be better if you're ok with a 25-30yr amortization, 0.5 pts, and 6.75-7% rates (currently). I can send some referrals over.

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          Justin Pumpr
          • Oakland, CA
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          Justin Pumpr
          • Oakland, CA
          Replied Apr 10 2023, 16:34

          @Marc Rice Yes please send some referrals my way! I'm getting a solid selection of lenders to choose from, so the more the merrier as there's been a huge range so far. Seasoning has been the biggest issue since I paid in cash. I can either get my money back sooner, but pay a higher rate, or get a low rate, but have to pay loads of points to get it, or the LTV is too low. Nobody is really ticking all the boxes at the moment.

          Thanks to everyone for the input thus far!

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          Steven Wilson
          • Banker
          • Nationwide
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          Steven Wilson
          • Banker
          • Nationwide
          Replied Apr 11 2023, 19:19

          Hey Justin,

          You can be cashed out with no seasoning, but only up to 70%. We also don't care how many properties you own and have DSCR loans in the 6's today, no points. May I suggest a 40 year I/O for any potential purchases?....Cashflow is king sir!

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          Justin Pumpr
          • Oakland, CA
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          Justin Pumpr
          • Oakland, CA
          Replied Apr 11 2023, 21:09
          Quote from @Steven Wilson:

          Hey Justin,

          You can be cashed out with no seasoning, but only up to 70%. We also don't care how many properties you own and have DSCR loans in the 6's today, no points. May I suggest a 40 year I/O for any potential purchases?....Cashflow is king sir!

          Thanks Steve. Is that 70% of purchase and rehab, or 70% of ARV? What about after seasoning and how long is that? 40 year I/o is tempting! Is that for purchases only and not for refis?
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