All Forum Posts by: AJ Exner

Hey Camden,

How many other flips/investments do you own and how much is the estimated rehab and After-Repair value going to be?

Hey Harold, 

Again, congrats on the work so far, exploring new markets and continuing to expand sounds like a great next step.

I think you are at the point in your scaling that there should be plenty of opportunities for reduced leverage on true BRRRR scenarios. Assuming your credit is decent, you have the rehab you are wrapping up, and your existing portfolio, there are lenders that would give you good leverage (85%-90%) that could help you on the next round of projects.

Each HML is going to have different things that they would consider as 'experience' and it sounds like you had one that only considered rehab-exits (refi or sold) within a given period of time. Sometimes you can track down HMLs that will leverage existing rentals for at least 'partial' credit, assuming that the rehab is light.

Let me know if I could help, I think vetting the HML for that specifically might save you some headache and potentially keep more money in your pocket.

Good luck! Happy to connect and help

In my recent experience, I'm seeing appraisers lean on recent comps with adjusters. 

Actually had a client lately who was refinancing a quadplex up in Pittsburgh that ran into a similar issue. We ended up doing two appraisals and they both came in lower than we expected.

Unfortunately we are in the 'dating' phase, dating the rate, marrying the property. We know that a solid, cash-flowing property will appreciate well over the next couple of years, so taking on the rate environment with a DSCR loan with a reduced Prepayment Penalty has been a good solution for a few folks that I know that are taking it on right now.

Best of both worlds

Hey Robert,

Congrats on the news! Definitely makes things more interesting!

As for the refinance, you are probably seeing prices dip because of the current rate environment we find ourselves in. With higher rates, less people are buying which is keeping supply up. That, in turn, brings prices (comps and ARVs) down, supply-demand.

That being said, I don't think that time is going to make anything much better. **OPINION - NON EDUCATED ALERT** Rates might be a little better, but values might not be.

I think you might have to wait too long if you did that, and in my experience, money 'now' is better than money 'later'. Obviously it is your decision but if you are in a good debt vs. equity position, it might be worth dipping your toe in the water to try.

Good luck though, happy to connect and talk through it more if you would like.

Hey Michael,

There are programs that can sneak below that 100k mark, but you'll want to keep an eye on their fees. A lot of times, you run into the 'minimum fees' of groups that are the same regardless of amount but can be a bigger chunk of those smaller loan amounts.

Happy to connect and talk through it if you have any questions.

Good luck!

¡Felicidades por el progreso! Espero que las cosas sigan juntándose para ti.

Con respecto a los puntos que mencionaste:

1. Tienes razón en que estar bien preparado puede ayudarte en el futuro, pero desde la perspectiva del prestamista sigues siendo una mercancía desconocida. No te conocen a ti ni a nadie de tu equipo y hay muchas personas bien preparadas y bien intencionadas que se han puesto patas arriba en las propiedades porque surgió algo para lo que no estaban preparados. Si piensas en prestar como inversor, prefiero invertir más dinero en un producto probado que en algo desconocido, y eso es lo que está sucediendo

2. Porque hay demasiadas variables, y honestamente los grupos que están haciendo una financiación del 100% le cobrarán una buena cantidad de puntos/tasas por hacerlo. Además, cuando prestan el dinero (especialmente TODO el dinero) escriben las reglas y encuentro que sus directrices son bastante estrictas para que suceda

3. Ese siempre será el caso. Yo soy todo lo contrario y trato principalmente con grandes corporaciones, pero el dinero privado les vencerá 9,5 de cada 10 veces porque no tienen tantas manos que alimentar.

Creo que cuando se trata de nuevos inversores, la puntuación de crédito y un proyecto manejable es un gran punto de partida. A menudo veo cuando los "ojos de un inversor son demasiado grandes" y ven grandes números en lugar de obtener acuerdos repetibles y confiables. Un amigo inversor me dijo que es mejor ir por individuales y dobles y sorprenderse cuando golpeas un jonrón en lugar de tratar de hacer de cada trato un jonrón. Te mojar los pies y probar algunos fáciles es una gran manera de empezar.

¡Buena suerte! Y me encanta que podamos tener conversaciones como esta en diferentes idiomas y desde diferentes lugares, gracias a Dios por el traductor de Google

Hey Joseph,

Sounds like a seasoning issue, and if you show any kind of work done to the property since it was purchased than I know that, at the very least, that first group you mentioned is usually pretty flexible with appraised vs. listed/purchased value.

How long have you owned this property and do you have a tenant in there currently?

I think its having a clear picture of which lenders are most 'comfortable' with first timers and what their expectations are and leverage requirements.

I think what I've found in working with investors is starting with an unrealistic expectation of leverage (100% financing) or a misunderstanding of a lender's 'buy box'. 

Understanding the requirements of the lender, especially for a first timer (minimum purchase price, required rehab-to-purchase allowed, regions they will/won't lend to, etc) are all factors that they have to know or anticipate going into applying with a lender, so for the first few, a good HM broker isn't a bad idea. Especially if you are looking into tough areas (Det, Chi, STL, etc.).

Then, being okay with anything from 10% to 30% down on the first one (potentially), having reserves, and/or a decent FICO can all help. All in all, it unfortunately comes down to having clarity with your goals and finding a way to optimize your time in line with finding a deal and being willing to jump in.

It is a lot and it makes sense why so many can struggle to get going.

Good luck! Happy to connect and help!

That would be the only other thing is concern about your experience doing this as a first time STR/MTR investor, but as you can see, plenty of others to choose from.

Just let me know, obviously if you can find a local CU that can do this in your specific area that sounds optimal. But let me know if you can't! Happy to help and connect how I can