All Forum Posts by: Alexander Pagano

Hey Keith, a lot going on here. Let's break it down to make it simple.

1. The Sonyma FHA loan, if you refi the loan, move from before the 10 year requirement, etc. You will most likely have to pay a portion of the down payment assistance back. I am not familiar with this exact DPA program. But state agencys usually have strong rules for this. I would first find out what the penalty would be from the lender who originated this loan.

2. You can definitely refi your current home into a DSCR loan. More specifically, you can refi out of your name and into a LLC only your wife owns. A potential issue that could pop up with the refi is your current address on the application being the subject property on a business purpose DSCR loan. How soon do you plan on moving to TX? The move would probably have to be pretty simultaneously with the refi.

Seems like your best course of action would be to see:
- How much the penalty would be to refi and move out of your home. How much of the DPA you would have to pay back. Call your previous lender to find out or the state.
- Refi the home out of your ownership and possession to your wife. You would no longer own this home. So this would not count towards your DTI on your new home.
- Move. For this to work and all make sense, you will have to move and get ready to take that leap.

If you have any questions on the DSCR loan and closing in an LLC, feel free to shoot me a message. I am happy to help!

I know a few investors in college towns who make a killing from buying homes, renovating, then renting out to multiple students per each room. Can be super lucrative, especially in lower cost college towns where the barrier to entry is lower. 

Hey Leonard, others had some great replies. I will add, locality can help get an offer accepted. Some sellers prefer to work with a local lender, usually advice given to them by their agent. PA and NJ are fairly close so you may not run into that nearly as much. But something to keep in mind. 

I would suggest looking into private financing options. Private financing would be an investor, investing their own capital and lending you the funds with their terms. I would make sure your numbers are solid and that the deal would make sense and is lucrative for the investor. 

@Allen Zhu Copy that. I am not familiar with them. From a loan standpoint, I would run the DSCR numbers/scenario first to make sure your numbers make sense post rehab. If you need any help running the numbers, feel free to reach out to me.

Hey Allen, it all depends on your goals. These types of loans are meant to be quick in and quick out. 10% does not seem out of ordinary for a fix & flip loan. If you are looking to buy, renovate, and flip/or refi it is imperative that you have a team that is efficient so you can get it done before the loan matures/balloons. These loans usually only have lengths on average from 6-12 months. Once the loan matures, the interest rate could go even higher and you can actually start losing equity in the deal. If you want to share some specifics on what you are looking to exactly do, I am happy to help answer any questions. 

Hi Kristin, if you reached out to a lender about refinancing the property and they turned you away due to the loan amount, then it was most likely a DSCR loan product. Most DSCR lenders have a minimum loan amount of $100k. If you can qualify for conventional cash out refinancing, most lenders do not have a minimum loan amount requirement. Let me know if you have any questions!