All Forum Posts by: AJ Exner

Yeah, I'll second the 'close-a-bility' element. There are plenty of things in REI that can make a deal go sideways, so I love working with a program that can sniff out things ahead of time when possible, and work through them as they come up.

As much as anything, familiarity is a big part. Not just trying to fit some lender's buy-box into yours, but finding the right fit for you, whether its location, amount, seasoning, speed, requirements, there are so many little elements that can make things better/worse that having that familiarity can even supersede a slightly better rate or some extra fees. 

I had a mentor that used to say "don't step over dollars for dimes" and I think paying a little more in an underwriting fee to get a deal done in a timely manner so that I can move on to the next one is well worth it.

And, of course, sometimes a good broker can help you find the right fit for most of these things!

Hope that helps, good luck in your selection process

I think I would lean with what @Devin Peterson is saying, if you went HM I think you could find someone but the closing costs/fees would cut into it pretty deeply.

Now if there is equity, you could borrow off of that and include some rehab funds and go with more of like a BRRRR strategy, but at those amounts it might not make sense.

Is the project there in Rapid City?

Hey Julia,

I would create an LLC, either in GA or FL and then QCD or even refinance into that LLC.

Usually during that process, not only will the LLC take ownership, but you can also choose to use an out-of-state LLC (say GA) and you would file as a Foreign Entity (usually pretty easy along with a Certificate of Good Standing).

So if you already have one in GA, as long as its primary function is REI then you should be fine.

Hope that helps! Happy to assist if you would like to connect.

Good luck!

Raj,

Some great points here, I might suggest a 'Bridge to Sell' loan. Some lenders are offering cash-out bridge loans (6-12 month terms) where you cash out of the new appraised value and get some capital out to either wrap up whatever you need to keep things moving while you wait on it to sell.

Without knowing ANYTHING about your situation, or even your market/deal, that could be a way where you continue to market and push it, while you get a little cash out of the deal.

Happy to connect if it would be helpful!

Hey Chris,

Welcome back, it has certainly changed a lot since then, but still good depending on you market.

The initial standouts on that list to me are SC and OH for the margins and the entry point, especially OH. Detroit can be tricky and you need some good people on the ground to help look around and get deals done, but the people I know who are really doing it are doing it well.

I would (personally) be a little more hesitant on NJ and FL. FL has seen some insurance issues and some lenders are pulling back a bit, but I think you would be okay in Lakeland/Orlando? Might just want to check. And lending in NJ is just a little different on the licensing front, so there are some good programs that just don't operate there. So not an indictment on the area, just my familiarity.

Good luck! Happy to connect and assist in any way I can!

Are you utilizing a non-recourse loan with your 401k or are you paying for it outright?

If you are using it for all of the funds I would confirm what the tax implications are. If you are leveraging it with debt, I would make sure that the lender that you are using is utilizing a true non-recourse loan to help you, especially considering that its tied to your 401k.

Good luck, happy to help if I can.

Hey Leeroy,

How many units are you looking at on this one? We are seeing adders though with some folks for 2-4 units, so I would be conscious there.

With a decent FICO you can hopefully see a lot of options sniffing around the high-6, low-7 range these days.

Good luck! Happy to help if I can.

There are a handful but you will want to keep a close eye on the fees. You will run into a lot of 'minimum fees' at that point, but definitely doable, should be around 7ish percent.

Happy to connect and help if you would like

Good luck!

Avery,

Congratulations on getting your portfolio to where it is! Starting out using conventional financing can be helpful, but at some point DTI certainly takes a toll and its good to pivot to that DSCR type financing.

I am hearing of more banks offering 'DSCR' loans, but from what I've seen there are still some elements of conventional financing that take place during the underwriting and processing of them. True DSCR loans won't cap you or limit you based on your Debt-to-Income because they recognize that the debt that the property incurs (P&I, taxes, insurance, etc.) can be covered by monthly rent and if you can find properties that 'pay for themselves' then they will lend you the money to find more and more.

Some DSCR programs will even alleviate on your personal credit and only require soft-pulls. It feels like it would be a perfect next step for you in your investment journey.

Happy to connect and see how we might be able to help!

Good luck