All Forum Posts by: AJ Exner

Quote from @Gene Hacker:

I am looking for a lender that works with rural properties in California.  The property I am trying to refinance is in town, and in a neighborhood and just up the road from the regional hospital but I guess the local population is low enough that it is considered rural for some lenders.  

I am hoping for recommendations of lenders that lend in rural areas like this.  

Thanks!

Hey Gene, 

Have you done an appraisal in that area before? If you have an appraisal from your purchase, a lot of lenders will go off of what the appraisal says (Urban, Suburban, Rural) as much as anything.

Otherwise, any lender that would do it would likely be at 65%. Unless it is a Short-Term Rental in a desirable area, then some programs might include it anyways.

Happy to take a look if it would help

Hey Noey,

The way I see it would either be a bridge (depending on how low) which wouldn't necessarily satisfy the 30 year stuff or getting creative on a 30 year.

You could bring on a person onto an LLC to act as a credit partner and to find a lender that would utilize their score for pricing. Another option that I know of that would cap you at 50% LTV.

So as long as the value is there (minimum loan amount = $75k), then you should be able to get something out of it.

Happy to help where I can, good luck!

Quote from @Ram Gonzales:

I have a property in Austin that I acquired recently for cash. Value is $475K+. Looking for an asset-based lender for an interest-only loan of around $250K for up to 5 years. I'm leasing to a family member for minimal rent, certainly no where close to market, so I don't think it would work for DSCR. I plan to use the proceeds to purchase another property. Any ideas of lenders who could do this? 650 credit score.

Ram,
Actually, I think you are really going to struggle to find a lender for a deal like this, but not due to a lack of options.

Analyzing the situation, I see a couple of potential lender implications that would make it tricky from a lender's perspective:
-Having it not DSCR is a decent sized hurdle to overcome, and in TX it is a little trickier due to the higher than average property tax. Having that tenant in there helps, but the other issue is..
-Leasing to a family member. Its a little thing, but for a lot of lenders if they are aware of that fact they won't lend. This is because most people would rather lose the property than lose the relationship with their family member
-That's a decent amount of money to payback, especially on a 5 year balloon. You would really need to show some kind of a payback/refinancing strategy to make most feel comfortable
-The 650 credit score is tricky as well, not impossible, but tricky.

Its a tough spot, but its especially tricky when you compound issues. I think there might be some options, but it might not be what you are hoping.

Good luck! Happy to help where I can.

Quote from @Tyler Herman:

Quote from @AJ Exner:

Hey Tyler,

I know of a few that require a certain leverage on the lower amounts, and I'm sure they would want to know your experience in spaces like that. That being said, I can certainly work within the 90k-120k refi.

Depending on the area, I'm not surprised that banks/CUs would struggle. Just shot a DM, happy to help if I can.

Good luck!

Thanks. Yeah the DSCR out is a lot easier. It's the initial loan that's more the issue. Would be nice to work with one person for both.

Totally understand,

Generally that initial purchase-rehab loans will also be driven by your experience in the area. So any additional exceptions, whether for purchase price or even total loan amount, would be more likely if you can show a healthy SREO. 

Hey Tyler,

I know of a few that require a certain leverage on the lower amounts, and I'm sure they would want to know your experience in spaces like that. That being said, I can certainly work within the 90k-120k refi.

Depending on the area, I'm not surprised that banks/CUs would struggle. Just shot a DM, happy to help if I can.

Good luck!

Quote from @John Semioli:

Hello, community! I'm looking for advice on refinancing a STR property in Pennsylvania. About a year ago, I took out a mortgage and recently added significant value to the house. However, I'm hitting a roadblock with traditional lenders, as my loan-to-value ratio (LTV) isn't matching their criteria. This seems to be a result of some smart accounting moves on my part, thanks to an investor-savvy accountant. As luxury vacation short-term rental hosts, has anyone faced a similar situation or have suggestions on how to proceed? Our goal is to pull out some of the rehab money we put into the property. Thanks in advance!

Hey John,

Sounds like the answer would be to utilize a DSCR lender that utilizes either pre-established STR rental income (if you can prove with AirBNB/VRBO statements) or a few that are still UW with AirDNA or a similar STR income projection program.

I am aware of a few still doing it at this time, and if you can show that you know what you are doing you shouldn't see much of a cut in LTV if at all.

Happy to connect and see if we can help.

Good luck!

Quote from @Maurice Smith:

Found a good hard money lender but they don’t lend on anything above 4 units.

any recommendations for some good hard money that lend on 5+ units in the  Ohio area  or nation wide would be appreciated. 

Maurice, 

Most are going to specialize in 1-4 units (as I'm sure you've come across) and within the ones doing 5+, you'll have to keep an eye on minimum purchase price/loan amounts and even minimum price per unit.

Do you have any experience doing 5+ unit rehab? That might help if you had.

Just shot a DM, happy to help where I can.

Thank you,

Quote from @Philip Jones:

Hey guys I am a Landlord out of Metro Detroit area. I am wondering who has done the BRRRR method as an investor and what institutions are investor friends for multiple BRRRS. Should I check into local smaller banks here or Credit Unions?

 Hey Philip,

It’s kind of tricky up in Det. I would check with a few different groups to make sure that they can operate in Detroit, and also to make sure that they will lend to the property in question based on the value. Many groups will have minimum property value/loan amounts that will probably need to be upfront with.

Quote from @Dominic Richardson:

I’m looking for recommendations on hard money lenders that are willing to finance properties purchased at auction.

I've encountered some challenges, as certain lenders require interior photos, but many auctions do not permit entry. Any suggestions on how to navigate this process and successfully close on these types of properties would be greatly appreciated.

Additionally, would a bridge loan be a viable option to help me close the transaction and then transition to a fix-and-flip loan when I have access to the interior?

Thank you for your assistance!

Dominic,

Auctions can be pretty tricky here. So I would argue that it has less to do with knowing the lender's requirements (bring on a broker or flexible group) and more to do with what the auction company requires. 

From my experience, the biggest factor is how the auction company works. It is very regional and differs by group, but some would say that you can't have interior access but you can have 30 days to close (quite a few lenders can do this), while others would allow interior access but you only have a week or less to have the funds (or same day in some instances). 

I would get to know the auction company first and what they will allow, and then work with either a couple of programs that would work or use a broker. 

The other option (if you have the capital) is to utilize an 'Unseasoned Refinance' or a 'Delayed Purchase' to essentially purchase in cash and then recoup those funds with a second closing. You won't get the full seasoned-ARV, but you can free up some capital after you purchase it and utilize a rehab-escrow to do the work. Not every lender does it, but it give you the bargaining power of cash while still maintaining some liquidity.

Good luck, happy to help where I can!

Quote from @Jay Hinrichs:

Geez I would be talking to your HML right now as I doubt they want to take it over.

and try to get a workout with them ASAP.. sounds like its going to be  a loss anyway you cut it and I have to think you put up cash for a down payment as well.

maybe someone else will have some pearls for you.

Wholesaler is going to low ball you for sure.

Absolutely 2nd Jay on this one, reach out to them and talk to them about the situation. They might request to re-process some aspect of the loan or to show some proof of some things, but most lenders don't want to deal with all of the back-end stuff on something like that. 

Unfortunately, it is likely a loss if you were planning on keeping it, but hopefully it won't be a true loss for you.

Good luck!