All Forum Posts by: Brian Cauldwell

PA is a great place to start. The lower home values can still lead to a decent cash flow even for single-family homes. However, cash flow is hard when starting out a rental portfolio. The cash flow you make from one property will most likely go back into the property for repairs and upkeep. One 2-4 unit property will probably be the same as well—more tenants, more things to fix. 

Yes, you can either create a new LLC in Pennsylvania or file a Foreign Registration, allowing you to use your existing LLC in Pennsylvania.

Pennsylvania is interesting when it comes to DSCR financing due to prepayment penalty laws.

Definitely a concern. If it were my first investment property, I would have moved on as well. 

In my experience, most experienced investors have a lender or broker they trust, but are always searching for the best deal possible. Even clients I have closed 20+ loans for, I expect to be shopping around, trying to find the best deal. Ultimately, this space is about generating revenue. The space changes daily, and new lenders emerge all the time. New lenders come with risk, because you don't know their process. 

Got it! Should be pretty simple then. A DSCR/Fix and flip lender would be able to do a refinance/rehab loan. Get the property in shape, and then refinance it into a long-term DSCR loan to pull cash out. Then use that cash to fund the other fix-and-flip projects. With that kind of equity, you should be able to build a good-sized portfolio without having to use cash from anything else.

DSCR loan won't care about DTI, which will be necessary for him once he is fully retired. I'd be happy to discuss options with you!

The house that he bought that needs repairs. Is that his primary residence? There are a couple of routes he could take, depending on that answer 

If you have the cash yourself you could get a DSCR fix and flip loan. They do not care about DTI which looks to be your concern.

DSCR loans. The lenders we work with do not care about DTI. Credit score, and cash flow for the rental property are the primary factors.

A DSCR loan can go up to 75% LTV on a cash-out refinance.

Never heard of them. Been doing real estate loans for 3 1/2 years. I tried looking them up online, but I couldn't even find them. Sometimes new lenders can be more aggressive as they are wanting to grow and gain more clients. Can be a risk too.