All Forum Posts by: AJ Exner

I would even add that valuations have been a pretty big hurdle across the board.

Certainly seeing it in some markets more than others, but I think because of the 'buyers' market and prices starting to go down a little bit, some comps and valuations are really struggling and playing a big role in the tougher 'underwriting' (being that some deals just aren't penciling)

There are a hand full of HMLs that I know keep things pretty 'in-house' (desktop appraisals/etc.) that I've seen them close in 5 days or less for sure.

Of course, with HML you always need to keep an eye on what that 'speed' costs. There are a lot of great options but being aware of what that might look like is important going into a deal so that you're not surprised at the closing table

Hey James,

Biggest differentiator that I see with true non-recourse, SDIRA loans is leverage. They are riskier loans for the lender (easier to 'walk away') so they tend to cap your leverage at ~70%.

Rate is maybe a tick higher, but pretty standard other than that.

Happy to connect and help if I can. 

Good luck!

In my market (Missouri) I'm seeing the higher price homes staying on the market a little bit. 

With the high(ish) rates its leaving the $500k-$600k+ homes sitting a little longer while your smaller SFH/rentals are pretty active especially with higher rental amounts.

Seeing flippers working more volume than anything else, which obviously complicates a few things but keeping an eye on the market for those higher value ones to start moving again, hoping this spring.

Devvrat, 

Would recommend partnering with a lender that only requires soft-pulls which tend to be more and more of the DSCR Lenders.

It is certainly an element of scaling that is important to keep an eye on. Especially if you are BRRRR-ing properties, you run the risk of two hard inquiries for every property which can add up quickly.

Good luck!

Sounds like Hard Money would be a decent option as long as they are okay with some seller financing.

I think I know a group that might be able to help, where is the property located?

Hey Joseph,

They are harder to find, but there are a few groups that would do it at a max leverage of about 60%-65%.

Happy to point you in the right direction

Good luck!

Hey Marcus,

I would imagine that there are some bridge (1-2 year term) Interest-only loans that I would imagine could get you close to 70% leverage and buy you some time to help bring the FICO up a little bit.

Otherwise, I always see DSCR loans as 'Asset-based, FICO-informed' so your credit will certainly play a role. The programs I know allowing for ~60-65% on a DSCR would have a higher interest rate as well (probably around 9.5%) with the standard 3- or 5-year prepayment penalty.

It would heavily depend on what you would like to do and how you would like to do it. It certainly is possible in a couple of different ways and having the reserves will help give you at least a few options.

Happy to connect and talk through it further if you would like.

Good luck!

I think that fluctuation in responses shows the variability of real estate investing. What's good for one person might not (and probably is not) good for someone else.

I guess I can share where I am, I'm getting ready to refinance my investments because I had purchased one a little over a year ago and its already appreciated a decent amount and its sitting at 7.99% (still cash flows, but getting 6.25%) while the other is in a construction loan that won't mature until the end of the year, but I would rather have the cash now than the cash flow.

I do have one other that has some 'golden handcuffs' (tons of equity, 2020 rate), but at some point I have to reconcile that the cash now to purchase more investments will help me at this stage in my journey than to build it up slowly. I guess it would really have to depend not just on who you are as an investor, as it does where you are in your investing journey. At some point, I will not worry about building and expanding my portfolio, but rather in growing equity and cash flow. 

Alas, I am not there yet, so I would say that you should refi. But I am a random internet man, so hopefully you have a good grasp on your goals and can decide based on that and not random internet people.

Good luck! Happy to help if I can

Most DSCR loans want to see only 90 days of seasoning (including the ~30 days it takes to refinance).

Some programs might make an exception if you've done some rehab to it, but given your scenario I think you could just get a tenant in there, stabilize it, and get started on the refi in about a month or so.