All Forum Posts by: Brandon Beardt

Quote from @Kim Jones:

Can anyone refer me to a reputable hard money lender. Thanks so much, Kim

 Hi Kim,

What are you trying to accomplish with a hard money lender? Details are important! It may help respondents point you in the right direction to what you're looking for. Best of luck!

Quote from @Jay Smith:

Hello, I’m finishing up on a property and will be ready to refinance the property to pull my investment out. Originally I was going to do a cash out refi with the loan officer at a local bank, but I found out about lenders that will loan money base off the operational income of the property. Do anyone know or are lenders in Michigan the do “debt service loans” 

 Hi Jay,

Being aware of your different financing options is a great tool to utilize in today's market. I would talk to a variety of different lenders & brokers regarding DSCR financing to find one that best suites your needs. There are lenders/brokers all across this forum that are familiar with the concept, but the product/program they actually offer could have some minor differences between each other that make a big impact on you and your scenario (loan level pricing adjustments like experience, LTV, & FICO requirements, etc). Typically you're able to close in either your personal name or LLC, but it sounds like you already have an LLC that you want to close in. Best of luck!

Quote from @Jordan Lutz:

Hey so Im trying to  find a lender that will do a loan based on the Lease agreements and the appraisal.   I already have owner financed loans and mobile home parks that I own and single family.     How are people borrowing on their portfolios to buy more rentals ? 

Hi Jordan, when you say loans based on the lease agreements and appraisals, do you simply mean loans based on the income of the property? If so, as I'm sure you've seen throughout the forums, there are DSCR lenders that will do just that. They'll look at the lease agreement, compare it to the projected monthly debt, and if the income is greater than the debt service, the lender will proceed with the deal. Of course there's much more to it than that throughout the process, but the broad idea remains. Many investors are taking advantage of this opportunity where lenders will give them 75%-80% LTV on properties that simply cashflow, without having to provide income verification documentation.

Quote from @Sean Starkey:

Hi all! So my DTI is currently too high to qualify for a conventional loan. If I go DSCR route how much do they give you towards the house ? I know it's based on income the house makes so that could be tricky question. I need to be creative with financing now to continue to scale I feel stuck. I currently have 1 STR near Joshua tree CA

Hi Sean, DSCR lenders will typically give you 75% LTV for a purchase/refi. Some can even go up to 80% LTV on purchases but that'll increase pricing. If you're trying to put less money in the deal & go with 80% LTV, just make sure the DSCR still works as the ratio can get tight at that level since the loan amount AND rate increases. Best of luck!

Quote from @Kathy Lowery:

My lender states I need to show rental income on my taxes before I can refinance my investment property. Since I purchased it in December it won't  show until next year. 

How do I get around this? I hear investors say they refinanced in 3 to 6 months using the BRRR strategy all the time. Surely they can't be waiting until they file their taxes to do so.

What mortgage product will allow me to quickly refinance? There are no limitations (pre-payment penalty) on my existing mortgage. So I'm not sure why I have to wait so long. Does the quick refinance only apply if you purchased your investment property in cash? I've heard investors state they have refinanced hard-money loans in a short period of time. Does this not apply to a good old-fashioned investment property mortgage?

Thanks in advance!!!

Hi Kathy, many business purpose lenders will allow you to cash-out refinance within their required title seasoning period (typically between 3-6 months) without having to wait until they report on your tax returns. These business purpose loans have different qualification metrics than full-doc conventional programs. This type of financing (Non QM) includes programs such as bank statement loans & DSCR loans - programs I'm sure you've seen being mentioned throughout the forums as their popularity has increased drastically. If you choose to stay the conventional route, it seems like you may have to wait until it shows on your taxes (according to your lender) in order to do the cashout refi. If were to go the Non QM financing route, the rates will be higher, but it seems like you'd be able to utilize the cashout refinance much sooner. I'd say talk to a few different lenders to get a better sense of what you'd be able to accomplish based on your goals & current situation. Best of luck!

Quote from @Zachary Breverman:

Does anyone know of a bank/broker that offers interest only loans for investment properties?

Hi Zachary, there are a ton of lenders/brokers that have I/O options for investment properties. Lucky for you, they are scattered all across the forums haha. Any lender/broker that works with investment properties SHOULD have access to I/O options. Usually its a 10yr I/O period followed by 20yr amortized, but some lenders have different options. I'd say research different investment lenders here on BP, read their reviews, and talk to a few different ones to help gauge which one has options that meet your needs. Good luck!

Quote from @Danny Jimenez:

Hello all! 

Currently looking at my financing options as i currently do not have a W-2 job (self employed) so a conventional loan is out of the question.

Through an agent i know, i discovered the DSCR loan which does not take into account my income.

For those who have experience using this type of loan. What are some things to look for when searching for these types of loans and where did you find the lenders you ended up using?

Thank you for your time in advanced. Looking forward to chatting!

Hi Danny, the DSCR loan is a great tool to have in your REI arsenal, especially if you're unable to qualify conventionally. Different lenders will have different pricing adjustments based on LTV, FICO score, experience, & other factors, but the general broad idea is the same - if the rent >= PITI(A), the property will generally qualify. Some lenders may allow you to go negative, down to .9 DSCR while others won't even consider the DSCR during their calculation. Just kind of depends on the scenario and the lender, & it always helps to have contributing factors like reserves or experience. Rates are always higher in this space, but there's a lot more freedom in how you can structure the loan to make it work for you since guidelines are less stringent. You can even explore STRs with DSCR financing if you'd like. You just have to talk to different lenders/brokers and find one that best suits your needs. As I'm sure you can tell, there are a ton here on BP at your disposal haha. Best of luck!

Quote from @Brady Ascheman:

Hi everyone, I am a 21 year old kid from the small town of Benson MN. I just bought my first house on a contract for deed and bought my second house as a rental using a conventional loan. I want to keep the momentum going but it is pretty obvious I am not going to just be able to keep getting conventional loans because I will run out of money on the down payments. On this first rental I plan on rehabbing it and create some forced appreciation. My question for the BP community is if I did a cash-out refi on this property after rehabbing it can you use that equity as the down payment on your next loan for the next rental property? Thanks 

 Hi Brady,

Yes, you would be able to use the cash-out proceeds from the refinance as the down payment for your next property. You just got to make sure you're on title for the subject property for the mandatory amount of time deemed by the lender in order to be able to do a cashout refinance. This is usually 6 months. Once you close on the refinance, escrow will either wire you the funds or send you a check for the cashout amount minus any closing costs. Hope this helps and good luck!

Quote from @Ailyn Carrillo:

Hello, I currently own 2 rental properties, I am really eager to buy my 3rd but am afraid I won’t qualify. What can I do to buy that 3rd property ? Also I am located in Amarillo Texas! 

 Hi Ailyn,

Glad to hear that your eager to expand your RE portfolio! What exactly is the reason you think you won't qualify? DTI, down payment, income, etc? Knowing this is important to understanding a little bit more about your current situation to help responders point you in the right direction. If you're afraid you won't qualify for conventional financing, there are alternative financing options available through Non-QM programs. These include programs that you see all through out BP such as Bank Statement Loans & DSCR loans. Rates are higher, but there are less stringent guidelines which may suite your needs. I would try and search for some more information on the BP forums regarding these types of financing options because they may be what you are looking for. Along with that, there are a MULTITUDE of ways you can buy another property - too many to list in 1 post, unfortunately. But generally, financing is a big one. Best of luck!

Quote from @James Brants:

Hello all!

I just started my LLC and are looking for advice on financing. How difficult is it to obtain the Capital needed for a single family under my LLC? how much of a down payment? Can you get pre approved?

I know there are better ways on what to start with, I’m just trying to start simple and build my confidence/experience.

 Hi James,

Congrats on starting your LLC! To answer your questions - it's not too difficult to obtain properties under your LLC, especially with alternative financing. I will say, however, that if you're planning on purchasing properties out of the state of where your LLC is registered in, you may have to file for a certificate of foreign qualification in order to do business in that state. Many business purpose lenders require this and some actually miss it when going through the underwriting process. But if they do catch it, the legal team will require it, & depending on how busy that particular state's secretary of state office is, it can take a while to get one. Just a heads up as this has come up in the past. In regards to down payment, 25% is typical. Some lenders will allow you to go 20% down, but you'll have to meet a certain FICO threshold and it'll also increase the rate. Regarding pre-approval, yes, you can get pre-approved but it'll also depend on which loan product you're going with. Hope this helps you out. Wishing you the best of luck on your journey!