All Forum Posts by: Brittany Minocchi
Brittany Minocchi has started 9 posts and replied 960 times.
Post: Where To Borrow For LLC
- Lender
- Massillon, OH
- Posts 996
- Votes 479
Quote from @Aidan Alexandre:
Quote from @Brittany Minocchi:
Quote from @Aidan Alexandre:
A friend and I have started an LLC to begin real estate investing. We plan to flip houses to start and eventually branch out into different forms of real estate investments. We are approved for a HELOC of $100,000, but would like to use that money mainly for down payment and repairs if we decide to take it.
If not we could work out a down payment with cash, and finance the repairs through our day jobs. The problem is, we don't know where to go to finance the house under the LLC. We were hoping to get a much higher HELOC because of the amount equity in the home, but the debt to income ratio was just over the limit by a few percentage points.
The debt can be lowered and we could achieve a $230,000 HELOC, according to the mortgage broker. Should we attempt to lower the debt to income ratio, and get the HELOC increased to give us more wiggle room? Or stay at $100,000? And where should we look to get financing for the mortgage?
It is our intentions to only have the property for a short term, we don't plan on using the HELOC again, as long as we meet our goals. If all goes well when our money is liquid again we would roll it back into another investment. We are pretty much just looking to get ourselves in so we can learn through experience, and create a portfolio.
Any advice and knowledge would be very much appreciated, we are excited to get into the business!
If you want to lower your DTI there’s no harm in that, but don’t over-leverage yourself. Just because the equity is there doesn’t mean you should use it all, especially if you’re a beginner. Utilization will be better on your credit if you use $50k of a $200k line vs a $100k line, just make sure you’re disciplined when it comes to using the funds and paying them back.
Feel free to connect if you have any questions and good luck!
Thank you for your input! I have emailed a few hard money lenders this morning and will do research into the DSCR loans. From what I am understanding you suggest to get a hard money loan and when the repairs are done and we are ready to close bridge it into a DSCR loan?
Post: are there cash out refinances for 100K duplexes.
- Lender
- Massillon, OH
- Posts 996
- Votes 479
If you're using financing for the purchase, you may be looking at a 3-6 month seasoning period depending on where the value comes in. There are lenders that don't have seasoning requirements if you've completed rehab, but they typically have a $75-$100k min loan amount. Max LTV will depend on FICO and level of experience. Not sure if you used hard money or some other type of loan, but I'd make sure you don't have a prepayment penalty that would get triggered on a refi.
Hope that helps! Feel free to connect if you have any questions.
Post: I am a student
- Lender
- Massillon, OH
- Posts 996
- Votes 479
Quote from @Rashaad Jones:
Good day to all. My name is Rashaad Jones. I am honored to be amongst ambitious and purposeful people. I am here to build relationships and accumulate knowledge. I am a real estate investor in Nothern Ohio. My goal is to build a portfolio of investment properties in this region. I am eager to converse with brokers, institutional and private lenders, and others wanting to collaborate in this space. Feel free to connect. Thank you all for such an exciting opportunity!
I’m a mortgage broker and investor about 45 mins south of Cleveland, happy to connect!
Post: Where To Borrow For LLC
- Lender
- Massillon, OH
- Posts 996
- Votes 479
Quote from @Aidan Alexandre:
A friend and I have started an LLC to begin real estate investing. We plan to flip houses to start and eventually branch out into different forms of real estate investments. We are approved for a HELOC of $100,000, but would like to use that money mainly for down payment and repairs if we decide to take it.
If not we could work out a down payment with cash, and finance the repairs through our day jobs. The problem is, we don't know where to go to finance the house under the LLC. We were hoping to get a much higher HELOC because of the amount equity in the home, but the debt to income ratio was just over the limit by a few percentage points.
The debt can be lowered and we could achieve a $230,000 HELOC, according to the mortgage broker. Should we attempt to lower the debt to income ratio, and get the HELOC increased to give us more wiggle room? Or stay at $100,000? And where should we look to get financing for the mortgage?
It is our intentions to only have the property for a short term, we don't plan on using the HELOC again, as long as we meet our goals. If all goes well when our money is liquid again we would roll it back into another investment. We are pretty much just looking to get ourselves in so we can learn through experience, and create a portfolio.
Any advice and knowledge would be very much appreciated, we are excited to get into the business!
If you want to lower your DTI there’s no harm in that, but don’t over-leverage yourself. Just because the equity is there doesn’t mean you should use it all, especially if you’re a beginner. Utilization will be better on your credit if you use $50k of a $200k line vs a $100k line, just make sure you’re disciplined when it comes to using the funds and paying them back.
Feel free to connect if you have any questions and good luck!
Post: DSCR lenders who will do a cash out with 630 credit score
- Lender
- Massillon, OH
- Posts 996
- Votes 479
Quote from @Heather Halman:
Hoping to find some suggestions for lenders who will do a cash-out refi dscr loan for a lower credit score at 75% ltv. Purchased hard money as a fix and flip, recent deal fell through due to buyer's not being able to sell their home and considering dscr may be better for us as the rental value is there.
Post: Unrestricted Dscr Loan?
- Lender
- Massillon, OH
- Posts 996
- Votes 479
This is usually an issue with condos, not quads...happy to take a look and see if I can come up with anything for you if you'd like to connect.
Post: Refinance question for BRRRR
- Lender
- Massillon, OH
- Posts 996
- Votes 479
Most people take out as much equity as they can, up to 80% like you mentioned. There will be costs involved with the refi, so if you only take out enough to pay off the PML, you'll be paying the costs out of pocket instead of with the proceeds of your loan (assuming there's enough equity to do so). Pros - you have more money. Cons - you're paying interest on a higher amount and/or your rate will be higher with a higher LTV.
Post: Rental property mortgage
- Lender
- Massillon, OH
- Posts 996
- Votes 479
Quote from @Gene Jung:
thx all for replies. quick question. say I buy with 100% cash. Later can I take out cash out mortgage? Heloc or home equity interest cannot be deducted against rent income...
If you buy a property with cash, you can refinance within 6 months as a delayed finance (conventionally). After 6 months this would be a cash out refinance. With delayed finance, your LTV will be based on purchase price, NOT appraised value. There are ways around this with nonQM options.
Post: Partner / Lender Search
- Lender
- Massillon, OH
- Posts 996
- Votes 479
I can in some instances, but you'll have a higher % of fees in relation to the loan amount.
Post: DSCR Home Loan
- Lender
- Massillon, OH
- Posts 996
- Votes 479
Hey Laura -
Looks like everyone has provided you with pretty good info! A couple of things to add...
1. Prepayment penalty: this applies to DSCR loans, not conventional. You could have a penalty of anywhere from 0-5 years that would be triggered if you sold or refinanced the property. It's usually a % of the original loan balance or the unpaid principal balance. The shorter the PPP, the higher your rate.
2. Closing in an LLC: DSCR allows this, conventional does not. Not sure if that's a concern for you or not.
3. Rate: One thing about conventional is the rate might be a bit better, but may also pay more up front for that rate (in points). DSCR rates can still be had at "par", meaning no cost to the rate, but that rate may be higher. It boils down to whether a lower rate or lower out of pocket costs is more important to you.
If you have any questions or would like to connect, feel free to reach out!