All Forum Posts by: AJ Exner

Hey Margaret,

Great opportunities for sure. From the lenders perspective, there is slight hesitation on the GA side of things, as there are some intricacies within Georgia law when it comes to landlord liability that makes lenders a a little more hesitant in lending there. They definitely will continue to, as the markets in and around Atlanta are very good right now, but I would lean Little Rock as there are a lot of good opportunities there with good property values and rental income.

If there is one that you frequent more, that could also be helpful as you could check on your property a bit more that way.

There are quite a few that I am aware of that will do a 50k purchase with 100% of the renovation. Is this your first one or have you done a few before? 

Often times the terms will shift based on the purchase price as well as your FICO.

Would your parents consider going in on an LLC together with you and your wife? Most lenders are going to struggle with a purchase deal as it is because of it being an Arms-Length Transaction.

Hey Daniel,

Did you find an answer on this? Would be happy to talk through any details if you are still on the hunt and looking for some help here.

Hey @Spencer Elliott

I guess it would also depend on the 'builder's experience as well. Have they been on title on any rehab/fix and flip projects the last few years? Are they Licensed? What type of experience besides GUC to they have to offer? Do you guys have good FICO scores that could be used as leverage?

It would be a tough sell for sure, but you own the land and have put in for the soft costs, so that is helpful. We would just need to know a little more if I was looking at this for one of my clients.

Hello Raj,

It feels like these questions were mostly answered, but I would draw particular emphasis on your Guarantor idea. That is one of the big advantages to having and owning properties in an LLC, you can add some flexibility that can help strengthen your deal and provide better leverage.

If you think about it from a lender's perspective, there might be flight risk in never hearing from the individual again, especially if they do not live there. However, with another member of the entity who lives in the US, has citizenship there, and provides a point of contact for the lender to reach out to in case there is an issue, it would encourage them to help maximize leverage on cash out refinances (75-80% LTV).

I help a few of my clients do this, so it is definitely possible if you know how to do it on the front end.

Definitely agree with Jay on this one, the cost that you would incur to essentially do a refinance-rehab deal, or some kind of a stabilized bridge, you would be charged a few points and third party fees to change lenders and maybe save a point on the interest rate and add a couple of months extension would be a tough pill. It would also take away potential bandwidth of you that might delay the finish of the project.

Has the lender been responsive and accommodating up to this point? 

Hey Ty, 

The groups of lenders doing 80% on a cash out refinance is less then it has been, so it would depend on the state/region that you are in and what lender you decide to go with. Make sure when you do, to clarify what their seasoning requirement is as November is a tight window.

A solid cash-out with a >1.0 DSCR is a great start to your BRRR journey.

Yeah, 4 weeks is a much more accurate representation of that. I generally say to expect 30-40 days.

And yes, there are Hard Money lenders who can do your traditional short term bridge/rehab loan, as well as 30 year fixed. 

Hey Courtney,

Sorry I just saw this, so there are two ways that something like this could go. We would need to discuss where we set up funding to close on that day, which can get tricky with most lenders, or we set up delayed financing. 

Delayed financing would have you pay in cash, but then come alongside after that transaction and reimburse you the amount (~80% or whatever the LTV of purchase was) and recoup that liquidity shortly after close.

The biggest issue with doing that is tying up liquidity. If you have any kind of title issues (which can happen in auctions), it can delay the process.

Feel free to give me a call if you want to talk!