Investor · Chattanooga, TN · Member since 2009 · 1k+ posts · 903 votes
6y
I'm in Chattanooga and have relationships with a number of different lenders. That being said it really depends on what type of asset class you're wanting to purchase. Some of the portfolio lenders down here have tightened up on single family (1-4 unit) and are only doing 15 yr ams, which kills your cash flow. BRRR is also harder for a couple reasons. First is that appraisals are starting to come back not so great on some deals (signs of the market inflating) or the lenders are wanting you to demonstrate your basis in the property so they can make sure you still have skin in the game which defeats the purpose of BRRR. Put more directly, be prepared to keep a decent chunk in whatever you are buying. The fact you are out of market will also work against you somewhat if you don't have local management in place. Some banks absolutely won't touch you for that very reason even if you have local management. If you want to DM me I can send some referrals your way.
Rental Property Investor · Ithaca, NY · Member since 2015 · 1k+ posts · 1k+ votes
6y
@Renee Yarbrough
I looked at local lenders for the most favorable options. They tend to have the flexible rates and can be creative for investment properties. When you’re looking for a lender, find someone you click with. Its best to have someone high up jazzed about you and your investment goals. It comes in handy when your investment properties get presented to the board.
As far as questions you could ask about rates, their terms, closing costs. Maybe have an investment property you can present to them.
@Luke Carl...would you elaborate on your comment? I don't know what ''use up your 10 conventional first.' means. I'm headed down the BRRRR path and want a bank who will refinance. Maybe I should have made that clear in my initial question!
Just finance it conventionally you do not need a local bank yet. Local generally means a portfolio or a commercial loan. You don't need that if you're new and if the property has 4 units or less.
You've got way more things to figure out before you get to financing. For instance... are you trying to do this in Nashville? Nashville is one of THE toughest markets in the nation. If you're brand new AND trying to do Nashville.... probably not going to happen. Are you trying to do this with no money? BRRRR generally needs the FULL purchase price in cash AND the rehab price in cash. Forgive me for saying so but when a newb mentions BRRR that generally means "I'm looking for a free property" and that is a possibility, but there are quite a few steps involved and those steps involve cash. I hope this info triggers you to ask more specific questions and I hope I can find a way to help you!
Investor · Chattanooga, TN · Member since 2009 · 1k+ posts · 903 votes
6y
I'm in Chattanooga and have relationships with a number of different lenders. That being said it really depends on what type of asset class you're wanting to purchase. Some of the portfolio lenders down here have tightened up on single family (1-4 unit) and are only doing 15 yr ams, which kills your cash flow. BRRR is also harder for a couple reasons. First is that appraisals are starting to come back not so great on some deals (signs of the market inflating) or the lenders are wanting you to demonstrate your basis in the property so they can make sure you still have skin in the game which defeats the purpose of BRRR. Put more directly, be prepared to keep a decent chunk in whatever you are buying. The fact you are out of market will also work against you somewhat if you don't have local management in place. Some banks absolutely won't touch you for that very reason even if you have local management. If you want to DM me I can send some referrals your way.