Portfolio Lenders ?

Question

Good Afternoon,

Can someone who has personally dealt with and or knows of some Trusted Portfolio Lenders that are in the Desoto County,MS area

Thank you for the help and any information or personal experience anyone is willing to share with a Lender they have used that does Portfolio Lending.

And also please ..... What Terms did the Lender(s) you used offer,

1. Is The LTV based off of the ARV ?

2. What Percent down do they require ( 20% or 25% ) ?

3. What ( If any ) Seasoning Period do they require

4. What type of Interest Rate did you get

5. What ( if any ) amount of Points did you have to pay up front

6. What about tying the Costs for all of the Repairs into the Loan ...... Were the Funds administered to you for the work out of an Escrow account ? And how where the Draws given .... once a month ? Every week ?

Thanks again, I appreciate all of the help

Michael Dunn · Answer

Thank you Steven and Michael very much for your help and advice

Michael L. · Answer

@Steven Gesis Steve knows his stuff and is one of the best SFR investors and turnkey provides around. @Michael Dunn

Steven Gesis · Answer

Hi Michael

Great question, this is not an easy response!

I  had the amazing opportunity to transact with numerous portfolio lenders, let me be the first to say; this is the most reclusive space in lending I have yet to encounter.

My most recent encounter was complex! (probably understatement)

I think every portfolio has its own complexity, therefore it is critical to interview 4-5 lenders and simply define what is important for your strategy. Consider your strategy and be realistic, always remember, you have to have an exit strategy also!

1. LTV - can be a mixture of "LTC" - (Loan to Cost) and "LTV" - (Loan to Value) and can also be exclusive of one another

2. Can vary can go as low as 20%/25% and high as you like technically, depending on what you are looking to get out of it.

3. Seasoning, an important question that must be considered, whatever the policy the individual lender may have, make sure you receive this in writing.

4. Interest rate varies from very low 4.25% (Local Bank $500k or less) to 9.25% depending on lender based qualification. Another opportunity to consider is the loan being recourse or non-recourse.

5. I have seen 4 points on the loan origination and also 1 point on the origination.

6. Document Fees - can vary from $2,000 - $4,000 + Appraisal cost

7. If the home is being appraised as LTV should be post construction, if you are looking for a renovation loan

I know this is probably not the exact answer you were seeking, but I think it should help broaden your play and help drill down the lender through a simple process of elimination, based on very specific qualifiers you define as it pertains to your specific strategy. Always remember, if it sounds to good to be true, it is not true!  This is not an easy exercise, but if you put some elbow grease in it you will find someone.

I personally like some of the larger lenders as they seem to be the most competitive.

Last advice: make sure to have good records an accurate / current data tape - not every loan is based on lender qualifications and LTV/LTC  - normally, the DSCR (debt service coverage ratio) carries a large weight in the overall risk profile.

Much Luck!

Clint Bolton · Answer

Hi Michael,

Shoot me an email or a private message and I will give you all the details on the portfolio lenders that I have a relationship with in Desoto county as well as how they typically operate and what they require.

Clint