Rental Property Investor · Crozet, VA · Member since 2016 · 44 posts · 31 votes
I have a stabilized 3/2 BRRR in Katy/ Cypress area (paid cash, rehab done and tenant stabilized). I am a full time REI so dont have a W2 to support my applications. ARV is around 157k and are looking at 70% refi fixed for 30 yrs so around 110k cash out.
On the table offer of 6.625% which is not horrible but not awesome either. Any comments or suggestions on this would be appreciated, as i need the cash to get onto the next deal.
@Ian Middleton Have you shopped that rate around to see if anyone can beat it? Maybe reach out to other investors in your target market to see if they recommend any other lenders.
@Luke Rorech thanks for the feedback and the main challenge is the fact that this loan is not secured by a W2 job (life can be challenging when you dont follow the safe path of corporate employment...:-)). I checked a few other options and managed to get a better rate (although not a huge change).
The main point is to refresh the finances to move onto the next deal, which will now be possible.
I have a stabilized 3/2 BRRR in Katy/ Cypress area (paid cash, rehab done and tenant stabilized). I am a full time REI so dont have a W2 to support my applications. ARV is around 157k and are looking at 70% refi fixed for 30 yrs so around 110k cash out.
On the table offer of 6.625% which is not horrible but not awesome either. Any comments or suggestions on this would be appreciated, as i need the cash to get onto the next deal.
What company was offering you the loan without having a W-2.?
If you borrow at 6.625 percent and turn it into anything above that then its a win. The rate is not fantastic in this market but if it allows you to get more cash flow and realize your dreams then its a great rate.
I think you could get a better rate with a commercial loan. The qualification is based on cash flow. Just offering another option. I have done many commercial loans with small local banks.
@Ian Middleton I’m in a similar situation. Self employed so no w2.
I'm refinancing a Non owner occupied triplex BRRR right now and I got offered 70% LTV on a $350k loan. I'll cash out $242k. I have $200k invested. My rate is 3.65% with 2.5% origination fee.
Ian, probably we could beat that for non-QM, but not by much. It's fair for non-QM.
OK now if you go back to the W-2 then you could get a great rate - in a couple years.
By your post I’m assuming that you do loans were a person does not have to use their tax returns is that correct?
Sure, they are pretty common. No tax returns, and no income verification at all.
Non QM here means it is a 'non-qualified' loan, which is to say, it doesn't have to meet the same standards that FHA/VA and government-backed paper has to meet. So instead, they have lower LTV rules - you aren't going to get 80% out on these loans - and rates are going to be maybe 1.5% - 2% higher.
I think you could get a better rate with a commercial loan. The qualification is based on cash flow. Just offering another option. I have done many commercial loans with small local banks.
Same. My latest loan was @ 4.25% with a local bank for a SFH cash out
@Ethan G., what do you have that is attractive for a non QM? This is pretty standard for non QM. @Simon S Marthinsen, your loan was definitely not a nonQM loan - I'm sure it was a Fannie, and with that said, 2.5% origination on a Fannie is pretty high.
Prior to COVID, rates where in the 6-6.5%, so this isn't too bad. All the nonQM products are coming back, but what I've seen is they're requiring a higher score now. Need 720+ to get the 75% LTV's, and 700+ to get 70%. Most are in the 65% range with 650 and higher. I wouldn't worry about a 1/4-1/2 pt. Get it done and get on to the next deal. Don't step over a dollar to pick up a dime!!!!
It’s through a broker so I’m not sure who the actual lender is yet. I just got the first approval. I thought the 2.5% was high as well and the 70% ltv is low. The broker said it was due to Covid. A few months ago I refi’d a 4plex received 2% closing at 4% interest with $156k cashout.
@Simon S Marthinsen did you provide tax returns? I highly doubt you're deal is asset based only. If so, that's the golden ticket for sure and you're broker will soon be flooded with inquiries!
Ugh, that doesn't sound great to me at all. I was hoping to look forward to more than that when I do my cashout. How much cash flow is being generated by the property? What's your credit rating? I bought my most recent property, a commercially zoned building, using a commercial loan at 4%, so I've been figuring I will be able to refi my investment properties at 4%. I also don't have W-2 income, but I have good cash flow and I'm reasonably liquid.
Since there is no personal income to report it seems as if you are using a portfolio lender offering a stated income loan. That rate isnt bad considering the conditions. If you think your situation changes in a few years you may not need the 30 year fixed option but around 6% is standard (based on credit)
@Ian Middleton As @Mark Sewell mentioned it's not bad for Non-QM rate. I assume you are going with portfolio lender. Did you try Visio lending. Let me know if you want me to refer to loan officer. Also commercial loan rates around 5.5-6% for 5 years with 20 year amort. They don't usually do 30 year fixed. You can try that with local bank like Allegiance or Frost for time period. That might help too.
@Chris Hopper yeah, i know they charge too many points but they have come down a bit recently. I haven't used them for a while but I don't see anyone else SOLID like them. Do share if you have someone solid and better.