All Forum Posts by: Brittany Minocchi

DSCRs may have a slighly higher interest rate vs. conventional, but you need to look at whether the income from the property will cover the monthly principal, interest, taxes and insurance and still allow you to cash flow. You mention not having much credit established, but do you know what your score is? 

HELOCs on investment properties can be hard to find and/or qualify for depending on the situation - many require that the title is NOT held by an entity. A HELOAN may be a more viable option. It's still second position (so it won't mess with your current mortgage) and allows you to hold title in an LLC/entity.

HELOC or HELOAN. Both second position so they won't mess with your current rate. HELOC is a variable rate line of credit (so you only make payments on what you have drawn), HELOAN is a fixed rate lump sum loan (similar to your first mortgage). You won't find lower than a 3.5% on a cash out refinance right now. 

Hey Terresa!

Welcome to BP and the world of investing. Best of luck in your journey! There are lots of folks here willing to help. 

Yep! You can look at a conventional cash out refinance which uses your employment and income as well as DTI to qualify you...or if that is an issue, then I'd suggest a DSCR loan. It doesn't take any of those into consideration.

For a rehab loan, generally the minimum is $100k (including a % of the purchase price and rehab funds). For a refi, there are lenders that will go a bit lower. On an $80k property, assuming 20% down, you'd need to roll in about $36k of rehab to hit that minimum. Depending on ARV, you'd want to make sure you can hit a $75-$100k loan amount for the refinance, so you'd take 75% of the ARV and see where you land. These are all rough estimates just to give you an idea.

Depends on the cost of the property, how much rehab it needs and what it will be worth after rehab...on a refi, you're usually looking at 75% max. If you look at the amount you'd need for acquisition and rehab from the HML and it's more than that 75% of ARV, that means you're coming out of pocket for the refinance. Don't forget to account for closing costs here as well.

66% LTV is an oddly specific number. You're at a 1.00 DSCR? With a 780 I'd think you should be able to get at least 70%, if not 75-80%. I don't have all of the info though. Is it a single family home?

As far as a rate lock extension, that's common. It varies by lender. As a broker, I have lenders that will extend the rate with no penalty at times, somes that charge per day with increasing per day costs for multiple locks, some that won't let you relock at all....

Hey Travis - 

You may be able to do a bridge and then refinance in to a long-term loan. The bridge would be 6-12 months, you'd have the funds to complete the rehab and then you'd refinance before the balloon comes due. Many people do a DSCR loan at this point, which would be a 30-year term. Bridge rates will be higher than the DSCR, likely double digits. Best case on a DSCR is usually high 6s/low 7s and up right now depending on the scenario.

Anything 1-4 units is considered residential, once you get into 5+ units THEN you're in the commercial space. There are multiple lenders that will allow 80% LTV on a DSCR purchase of a triplex. You'll see a jump in rate from 75%, so just make sure your numbers still pencil out. I'm not sure of your FICO, loan amount, etc...but I'd expect the difference in rate between 75% and 80% LTV to be around 0.5-1.0%. Feel free to reach out, happy to help if you have any other questions.