All Forum Posts by: Brittany Minocchi

Hey Avery!

1. Yep, you can use a product like a debt service loan to close in an LLC.

2. If you're asking for tax purposes, talking to a CPA would be your best bet. If you're talking about available financing options, there are business purpose loans (like the debt service loan I mentioned) that sometimes ONLY allow you to close as an entity, like an LLC.

If you have any other financing questions, I'm happy to chat! Feel free to reach out. 

Hey Sylvester - 

Happy to help if you're still looking for a lender, I'm in OH. Feel free to reach out. 

Happy to help if you're still looking, feel free to reach out!

Quote from @Petya Toncheva:

@Brittany Minocchi hi, thanks for bringing this up about origination. I am going to ask about that! Also I am going to see what’s negotiable, especially the 5 yr PPP, I really do not like that.

No problem! 5 years will give you the most favorable rate, but you should be able to take a lower prepay for a higher rate. I’d also ask how it’s structured - typically they are tiered (5/4/3/2/1) but I’ve seen some flat prepays as well, meaning the % of the penalty doesn’t decline during the prepay period. 

Happy to connect, but I agree with the other comments - a 650 FICO is doable, but terms will be better if you can get that to 680-700 ideally. Either way, feel free to reach out!

DSCRs can close in an LLC, no problem there! Happy to help.

Hey Vanja - 

I'm sticking to what I know here and offering the most insight with #1:

If you have an immediate use for all of the cash you're pulling, a cash out refi is a viable option. If you want to have access to that money "just in case", a HELOC may be better. The biggest difference here is that you'll pay P+I on the entire loan amount immediately with a cash out, but you'll only pay interest on what you draw on the HELOC during your draw period. HELOCs carry higher rates than cash out refis. If you want the least amount of paperwork, you could consider refinancing into a debt service loan. This is a business purpose loan and will have a prepayment penalty and possibly cost a bit more than conventional financing. You don't need to provide employment history, paystubs, w2s, tax returns, etc and DTI is not a factor. If you're looking for the cheapest route, conventional may be a better bet. There is more paperwork involved with that option.

Quote from @Ali Balapour:

Hi all,

I also have a duplex that I like to refi at 80% in Covington Ky. I was working with someone who made promises and then put a very different term sheet in front of me a week before closing so I am back on market shopping around.

 Figured I'd copy and paste my response to OP for you...

Doable, but expect to need 6+ months of reserves, 720+ FICO and a rate in the mid 7s-8% range.

Doable, but expect to need 6+ months of reserves, 720+ FICO and a rate in the mid 7s-8% range. 

Your rate seems a bit high for a 5-year prepay, but I don't know your FICO. There is no origination listed, which is odd for a DSCR loan...I would double-check that that's not something they'll sneak in there later. They could be listing it as discount points instead, but if that's NOT the case, you should have a credit (not a cost) for a 7% rate I'd think. You shouldn't need a VOE (verification of employment) since this loan type doesn't factor in employment history or income.