All Forum Posts by: Brandon Beardt

 Hi Ben,

Congrats on getting your first STR! Yes, you would be able to use a DSCR loan for a cash-out refinance. Typically LTV is capped at 75% for that kind of scenario, but considering you already have quite a bit of equity in the property, I would imagine it would be fine. DSCR lenders won't have to look at any of your personal income verification documents or look at DTI. Considering you're planning on doing the cash-out refi in a year or so, and the property is a STR, the lender will more than likely go off of the 12 month average rental income for qualification. Out of curiosity, did you have to put down 40% to keep in line with DTI?

 Hi Chuong,

No, you're not obligated to pay the "Total Lender Costs" amount if you choose not to go through with the loan. Appraisal fee should be the only thing you're being charged for before the loan closes. Everything else gets paid at closing.

There are some different avenues you can explore with regards to taking out equity. Pretty much either trying to find a HELOC lender who is willing to lend on a investment property or simply doing a cash-out refinance transaction. In terms of actual loan programs to look out for, it kind of depends on your comfort level and style. Do you prefer full doc conventional financing where you'd get the best rate and terms but qualification standards are more stringent? Or alternative financing where the rate is higher but qualification standards are less stringent? There are many pros and cons to each different strategy and a lot of things to consider in-between. Some program parameters could be advantageous while others, not so much. An example of alternative financing is DSCR which I'm SURE you've seen tossed around through the forums quite a bit & there's a good reason why. It's a very popular and advantageous program that investors are utilizing while it's still available. Hope this helps, feel free to reach out if you have any other questions!

 Hi Kevin,

There are many creative financing options that investors like yourself can utilize. Because there are so many, you have to narrow down your parameters to see which one's make the most sense for you. What type of property are you seeking (SFR, 2-4 unit, etc)? What down payment are you expecting? Is this a long term rental, short term rental, or BRRRR? Full, alt, or no doc loan? These details matter in pointing you in the right direction. Best of luck! :)

 

That's a fantastic goal to have. & of course! Always happy to help. 

 Hi Jose,

I would say that there's no right or wrong answer as to whether you should look for BRRRR or turnkey opportunities. More likely than not, there are deals out there that would make sense to do BOTH strategies. It's just finding those deals and making sure the numbers work for you and your comfort level. I wouldn't recommend only focusing on one or the other. You make money when you BUY and investors are still finding opportunities. If any opportunities come your way, analyze them - and if the numbers don't work, on to the next one! Today's market is making it harder to find deals but they are out there. Best of luck!

 Hi Shanna,

I typically see down payments for investment properties in the 20-25% range. You may be able to get away with 15% down on an investment SFR with conventional financing if you qualify and DTI is aligned. There also may be local credit unions/banks in the local area that you are searching in that may offer products with lower down payments for both SFRs and 2-4 units, but I wouldn't know. It may be worthwhile to check them out if your goal is to maximize your leverage and put as little down as possible. Are you strictly looking for conventional financing options? Or are you open to alternative financing to help expand your portfolio? Apart from conventional financing, you should know that there are many alternative financing options that a lot of brokers/lenders have to offer. These usually don't come with a super low down payment option, but come with other advantages that may be in your best interest. Many of them are actually discussed here in the forums. It'd be good to be knowledgeable of the different financing options you have available at your disposal. Best of luck to you! :)

 Hi Jason,

Congrats on identifying your second multi fam! Unfortunately, this is very common when trying to go the conventional financing route. Conventional lenders will ALWAYS go with the worst of the worst case scenarios. Out of curiosity - how does your DTI look in that current scenario? Are you still able to qualify given your DTI? If not, there are other brokers/lenders that work with alternative financing programs that may be able to help you out. Programs that wouldn't look at your DTI or anything in those regards. Qualification would simply be based on the asset's income itself. If you're still able to qualify with DTI and prefer the conventional financing route, then you should go for it. Just know there are always other options available.

 Hi David,

Yes, it's almost industry standard for private money lenders to have some sort of origination fee. That being said, it should ALWAYS be paid at closing once the loan actually closes. There are MANY brokers/lenders in the forums that can work with beginner RE investors, I would say most if not all. Usually they'll just require that you've had some sort of home ownership in the past, such as a primary residence, but that's not always the case. You can do some research on different lenders in the Network tab above or check out the various forums where they are actively posting. I'd say do some research and understand exactly what you're getting yourself into when working with a specific broker/lender. Don't go into the process not knowing what to expect. Also, talk to a bunch of them, you'll learn a lot along the way which'll help you grow as an investor. Best of luck to you!

 Hi Julie,

With full doc conventional financing, cash-out proceeds cannot be used as proof of reserves. Usually they require you to show you have 6 months of PITI payments separate from the transaction. Therefore, you must already have these funds available to show. With most alternative financing programs (alt/no doc), however, you ARE able to use the cash out funds as proof of reserves while also being able to buy your partner out. If you're very tight on cash - it may be worthwhile to explore this option. Also, to reiterate, you won't have to actually GIVE the lender the reserves for them to keep on their end - they just want to see that you have it available.