All Forum Posts by: AJ Exner
AJ Exner has started 1 posts and replied 549 times.
Post: Looking for referrals of DSCR lenders
- Lender
- Springfield, MO
- Posts 574
- Votes 285
Quote from @Tianyi Chen:
I have a few years of real estate experience with 1 primary residence in PA and 11 rental units in DE. Over the years (when the price and interest was still low), my wife and I only used conventional loans. Now, we want to switch to commercial loans to get more flexibility. We have about $1.95 millions of equity. We think we can get some decent size of HELOC and use cash offer to win some bids. Then, with little rehab work (we don't have much experience so we don't have large rehab work), we can refi with DSCR loans.
Question: can anyone refer us some good lenders for the loan we are looking for? Is there any other suggestions on our strategy?
Tianyi,
I think using a combination of HELOC funds + Delayed financing would help you accomplish what you are looking to do.
If you utilize a HELOC with a few of your properties, you can maintain the rate/payment that you are sitting at while utilizing the negotiating power of liquid capital.
Then, the idea is that you come behind the purchase and do a 'Delayed Purchase' which would reimburse you 75-80% of the purchase price, get you that initial capital back, and clean up any title/entity work you might need. The downside is that you would have to pay for a second closing, but it provides quite a bit of capacity and flexibility to my clients that utilize it.
I hope that helps, good luck!
Post: LTR deceased from 80% to 69% day before closing
- Lender
- Springfield, MO
- Posts 574
- Votes 285
Quote from @Adam Guy:
Hello, I'm not new to being a landlord but I'm new to private lenders. I recently have been working with a private lender on an off market duplex estate in a B+ area that a lawyer brought to me. It has been a long bumpy road including higher rates they originally told, 90 days instead of 45 days, and now I'm told the day before closing I need to bring 31% deposit. What they told me was, even though I think this place should get $1100-$1200 a month per unit, it was rented before at $900 per unit (well, the dad's son lived in one and he rented the other to his friend for $900) so I can only get a loan to cover 80% of that amount(or something like that).
Does all that make sense? Is it a sign that this property may not be worth what I think it is worth or is this a common thing?
The assessment came in at $10k over what I'm paying for it. The property fits the 1% rule and has some good potential for value add. I just never had this happen.
I appreciate any advice.
Hey Adam,
I do apologize for that, I know it can be frustrating. Unfortunately, real estate is often messy so I can't say I'm too surprised, so I'll do what I can to talk through each thing.
The rate float is not uncommon, as we've seen the 10 year treasury fluctuate a bit the last month or so, so I wouldn't be surprised if they had originally quoted something (guessing low 7s?) and its floated up to upper 7s, 8 range which is consistent with what I have been seeing as well.
I could see the leverage shift happen because of both the rate change and probably the active rent. On a DSCR loan, everything is based on the cash flow on paper. So while the rents should be getting $1100-$1200, if you submitted it cash flowing at $1200, but the rents come in "officially" at $900, then that is a HUGE difference in annualized return and likely the source of the leverage drop. Monthly rent + rate increase + probably getting a clearer picture of taxes/insurance would be my guess for that.
So I wouldn't completely blame whoever you were working with on that, but if it were my client I would have tried to get a clearer picture of that going into it and either treat it like a 'vacant' or go off of market rents (assuming they are closer to $1200).
Good luck!
Post: Looking for a Bridge Loan
- Lender
- Springfield, MO
- Posts 574
- Votes 285
Quote from @Zane Cress:
Currently have quotes on a DSCR but looking for a 12 month bridge option. MoFin has been unusually bad about responding so I am seeking someone who can pull something off by April 1. If you're a GA lender let's connect.
Deal - 775k house in prime location well under market value. 1031 Exchange funds ready to deploy for down payment.
Hey Zane,
Should have plenty of bites with that, but is the need for a bridge because of the timeline (needing by April 1) or for another factor? Are you planning on it being a Short-Term Rental? Is the end goal to put it into long term financing? Is it 5+ units (many standard bridge lenders are capped at 1-4 units).
Would love to help you but we would certainly need some more information as well as what kind of leverage you are needing to fully utilize the 1031.
Sent you a DM, but good luck regardless!
Post: Short term cash out no doc loan in Philadelphia, PA
- Lender
- Springfield, MO
- Posts 574
- Votes 285
Quote from @Mark Nguyen:
I will. Thanks Devin
What kind of leverage is he looking for? I had one good c/o bridge lender but they have cut leverage a bit as of late. How much is the property worth? Many will have minimum prices as well.
Post: Possible to get DSCR for rental and sell home early
- Lender
- Springfield, MO
- Posts 574
- Votes 285
Quote from @Khu Far:
Is it possible to get a DSCR loan for a SFH that you rent for 1 year and then be able to sell it and take the profit to reinvest?
Khu,
There are a few ways of doing it. You could either purchase it with a stabilized bridge loan which usually requires 25% down payment. Or you could find a group with a 30 year fixed (or Adjustable Rate) with reduced or removed Prepayment Penalty, but they will usually charge extra points or a higher rate to do it.
Not 100% sure on the strategy behind it, but would be happy to connect and talk through either.
Good luck!
Post: Short term Hard Money Loan
- Lender
- Springfield, MO
- Posts 574
- Votes 285
Quote from @Jason Semper:
Does anyone know of a short term hard money lender for a small amount? Looking for 40k and I know most lenders want at least 50. Need more of a bridge loan to get through to a refi eventually. Thank you
Is there any rehab/value add that can be done to it?
Post: Financing Single Family under $85,000.00 (section 8 tenant)
- Lender
- Springfield, MO
- Posts 574
- Votes 285
Hey Nick,
Definitely have to either work with a lender who does single asset at/below that number, or do a portfolio with a few others in the same amount.
You should still be able to find a few lenders to do smaller rehabs like that, as long as the ARV supports it, and often times the BRRRR tends to work better that way because if it is in a good Sec 8 area with rents that support the ARV, the refi can work out well.
Happy to connect and talk through details if you are interested!
Post: How Do I Finance My Third House WITHOUT W2 Income?
- Lender
- Springfield, MO
- Posts 574
- Votes 285
Quote from @Kayla Weigel:
Hi Everyone,
I bought my last 2 properties while I still had a W2 job. One property is a condo (in CA) that I rent out, and the other property is a house (in NV) that I live in and rent out the other rooms.
I quit my W2 job last year to start a business, which is slightly profitable today, but I reinvest everything back into the business.
I have a bunch of cash saved up and am comfortable deploying $100K into another property in Las Vegas ($80K down payment + $10K furnishing + $10K margin).
The only problem is that I’m not sure how to finance my next house without W2 income.
I talked to a few lenders about DSCR loans, and most say they calculate rental income based on the entire house, instead of by the room.
I would love to get the creative knowledge of the BP community on how to fund my next home 🙏🏼
I'm also open to any lender referrals 😊
Kayla,
You could utilize a DSCR loan with a lender that utilizes market rents or potential Short Term income as a possibility. Basically, from the lender's perspective, you just need to show how the asset is going to pay back the P&I and "cash flow" somehow.
Post: Can you get financing an a large bnb property?
- Lender
- Springfield, MO
- Posts 574
- Votes 285
Quote from @Daniel Murphy:
Hey everyone, I have a client who owns a bed & breakfast property in CA. They're running into issues with potential refinancing. Ideally, they would have access to a line of credit, or some type of loan for misc purchases. But here is what they are running into. Does anyone have ideas of who to talk?
- You can’t get an ag loan because you don’t grow anything.
- You can’t get a residential loan because you run a business on the property. Appraisers would do on-line and see the business website. We even had one guy book a room and then cancel.
- You can’t get a commercial loan because you live in the property
Could you do a DSCR loan on the property and establish a primary residence somewhere else?
Post: BRRRR using Sheriff Sale purchases and HELOC
- Lender
- Springfield, MO
- Posts 574
- Votes 285
Quote from @Jacolby Tillman:
Quote from @AJ Exner:
Mike,
Sounds pretty close, but I maybe add a tweak. With that kind of acquisition strategy, it might benefit to utilized a delayed purchase because most lenders struggle to underwrite deals in the span it takes for the auction to close.
If you do it delayed, you can stay mostly liquid, then follow up the purchase with essentially a cash out refinance of the purchase price with rehab funds being put into an escrow account as well.
Would be happy to explain further, but my clients that operate that way tend to prefer that method to keep getting their cash tied up too much.
please explain further sounds phenomenal
Jacolby,
You purchase 100% in cash, then you do a refinance of the purchase price (usually about 80-85%) and treat it like you would if you were 'purchasing' the property again (so downside is additional closing costs) and add the rehab escrow to reimburse for the rehab being done. Then in 3-6 months, you cash-out refinance at the ARV and by then, you might already be well into the next rehab project.
Happy to talk through it if you want to shoot me a DM!