All Forum Posts by: AJ Exner

Quote from @Sam McCormack:

Can I get some recommendations for hard money lenders that can do up to 80% of ARV in Cincinnati? Had people looking to flip but need more hard money contacts in my pocket. Thank you!

 Hey Sam,

Do you mean 80% on a purchase deal, or lending 80% ARV on a rehab deal? Most lenders will be at 70-75% ARV, but if you are just purchasing something, 80% is very doable, and if there is rehab needing to done they might even cover more.

Would love to connect and talk more about it if you have some time!

Hey Matthew,

Now is a great time to do a cash out, and based on the value of the property there are a hand full of lenders that can do that. 

Do you have tenants in them already or are you still trying to find some?

Quote from @Jorge Betancourt:

Does anyone know any hard money lenders that are willing to work with your deal based off the ARV? No seasoned assets, credit checks or bank statements?

how much money would I have to come out of pocket to work with a hard money lender in a fix and flip deal?

Hey Jorge,

Great to hear that you are jumping into the game and sounds like you have a good property to start.
So the money out of pocket is going to fluctuate quite a bit based on the lender, but no matter what in the HML space, most groups are at the very least credit 'informed', meaning that they would at least do a 'soft' inquiry and a back ground check to decide the terms and the risk of the investment from their perspective.

Of the lenders that I work with, there are a few that do no asset seasoning, and that is something that it feels would be VERY important to clarify on the front end of any deal you do. Most lenders will at least do a bank statement of some kind to confirm that you have the cash to close at least.

Otherwise, I would anticipate around 15%-20% down for your first time. With exceptional credit, there is a potential for more leverage, but that would be best to iron out with a broker or the lender on the front end.

I hope that helps! Let me know if I could help additionally in any way.

Quote from @Robert Rodriguez:

Hello looking to cash out refi my 2 properties into a DSCR loan. Credit is a little low between 630 and 640. Is there anyone that can lead me in the right direction. Thank you.

 Where are your properties located? Many lenders who I know of that can work with individuals with lower scores are pretty regionally focused.

With many DSCR lenders, there is flexibility within the LLC (assuming you are refinancing into an LLC) that you could add a 'credit partner' to help guarantee the loan and expand your list of potential lenders. Do you have anyone that may be willing or able to help?

Quote from @Dominique Gunderson:

Looking to see if anyone has some entity structure advice for my situation. I currently own an scorp that holds all of my fix and flip projects (this comes out to about 20ish flips per year). I have a couple properties right now that my scorp owns and completed a renovation on, but now I’d like to keep them as rentals instead of sell. 

I know I need to keep the long term holds separate from the scorp flips but wanted to know what’s the best entity to set up for holding the rentals? Should it be a sub entity of my scorp or completed separate? And how do I go about transferring the properties out of the scorp into whatever new entity I set up to hold the rentals? 

Any insight is much appreciated! 

I have found with my clients that LLCs provide the best bang for the buck. Easy to set up, flexibility in adding/removing members for what might be needed for a particular deal, and obviously the added legal protections and liabilities based on where it is created or the foreign entity filing. 

There are some lenders that would still lend to your scorp, but the option of batching investments under a single LLC, or even an LLC for each property, is what I see most lenders prefer to work with.

As for your current properties, refinancing them out of the scorp into an LLC is very doable, a couple of additional hoops, but very doable as either a cash out or a rate and term refinance.

Hope this helps!

Hey Charlie, 

Its good that you are looking into the numbers ahead of time, especially in calculating what your payments are going to look like and what kind of rates you might be looking at.

I think that estimating a 9% puts you in a good place, hopefully by the refinance it might even be lower. My clients over in NC are seeing a cash flow issue based on the full DSCR in the area (rate + taxes + insurance), so I would make sure that the numbers you are seeing are correct.

The only kicker might be some of the closing costs/fees. Are you planning on using Hard/Private financing? You might need even less money at purchase then you think.

Hey PJ,

There are still a few great lenders who can help like something like this, but you might run into some loan minimums with groups who can maximize leverage.

How much is the ARV? And how recently did you purchase it? You might also deal with some seasoning issues as well. And I'm assuming that you did some rehab to the property as well?

70% is certainly doable with the right group, and I actually think there are a few that can do 75% if the seasoning is there. 

@Shuvrajit Mukherjee

There are a few lenders that can close a 30 year fixed in your personal name. There is obviously the liability risk of doing that, but there are still some great options for either bridge or long term debt in your personal name with non-conventional sources. 

@Holly Barrett

How much equity do you currently have in the property? I know that there are a few lenders looking into this in the short term, but there needs to be enough equity in it for them to lend to to make it happen. 

Spoke to quite a few investors at BPCon that feel the same way though, almost trapped by how good the rates are. 

Hey @Sol Naim

Do you know if the condo could be acquired with conventional lending? If it is, and is classified as 'Warrantable' then you might have significantly more options compared to if it is 'non-Warrantable'. If it is non-warrantable, then your options are reduced, but certainly not obsolete. 

Also, with the numbers you provided, I'm seeing that it doesn't DSCR at 450k which will certainly hinder what you would be able to get out. With that monthly lease, it looks like it won't DSCR, or cash flow, until you get down to around 40% cash out (~$344k)

Having the equity that you do will certainly help, but I would be cautious trying to get more. With rates where they are, it will be tough to cash flow on a single family condo with long term leases.