All Forum Posts by: Carrie Matuga

@James Brown I think it's hard to run a calculation for a rehab and a BRRR together as they are really two separate stages. I'd run a calculator separately. For example, for stage 1 with rehab, you will have no rental income coming in, only expenses.

To buy a home with for 100K and 44K in rehab with 12.99% interest (which is high) and 3% origination (also on the higher side), assuming 85% LTC, your total loan will be 122,400 (78,400 for purchase and holdback of 44K). You will then need:

-- 21,600 down payment

-- 3672 Origination

-- 1400 (estimate) underwriting

-- 800 Processing (est.(

-- 1200 Title & Escrow (est.)

-- Interest Reserve TBD

-- 500 Appraisal (est)

-- Builders Risk Insurance Policy TBD

Total Cash to close: 29172 + 6 months payments (not in escrow but demonstrated)

You will likely need to wait 6 months to refinance. During this time that the project is finished, you will be able to rent it out and you will be able to offset your monthly payment with rent, but also will need to add in utlility payments.To get out of the bridge rehab loan, you will need to find another loan - likely a DSCR. With a new value of 186K, you new loan will be capped at 139500K, so you can do a cash out refinance and walk away with some cash. It will likely look something similar to this:

--139,500 NEW LOAN Amount

-- 122,400 PAYOFF

ORIGINATION: 2025

-- 1400 (estimate) underwriting

-- 800 Processing (est.(

-- 1200 Title & Escrow (est.)

-- Interest Reserve TBD

-- 500 Appraisal (est)

-- Insurance Policy TBD

Total Cash out available' approx 12,255

@Billy Houston You have a number of options. 

1. If timing is critical and being able to pay cash will "win" you more offers, then you could always do a delayed finance purchase where you buy in cash and refinance into a LT DSCR rate. This works so that you close with cash and as long as you do the refi within 6 months and are not seeking any additional cash out, you can do this. Essentially this is like a rate and term refinance,where you do not get any cash back you just go into a LT DSCR loan.

2. You can do a DSCR with up to 85% LTV as long as your credit score is over 720 and your DSCR ratio is above 1.2. If it's below that you'd be limited to 80%

3. You can look to seller financing or other creative means if that is an option with the seller.

Either way, I would say be careful if you do purchases below 100K that result in a loan below 100K, Options are severely limited and there is often an "interest rate penalty" if the loan is at this level and it is EXTREMELY challenging when the loan if below 75K. Reach out if you want to talk more. Happy to help in any way.

@Brandon Sisco Most DSCR options cap out at 80%, I do have an option for up to 85% LTV, but there are some caveats - 1) DSCR must be abover 1.2 2) credit min 740 3) interest rates are typically higher (0.75-1.25% higher). If you want to talk, send me a DM

Hi Matt, I'd suggest looking at local and being open to conversations with lenders that can lend nationwide. It's smart to have more than a few conversations because not everyone offers the same products, leverage or terms. Happy to be a resource. DM me

I think you are going to find your financing options extremely limited by the purchase price and the fact that the renovations are more than the purchase price. If you have the downpayment, I'd recommend amending your buy box to be a MINIMUM of 75K purchase price with ARV being greater than 130% of your cost basis (purchase + renovation). This way, too if you are keeping it when you go to refinance, your loan is a minimum of 75K, but ideally at least 100K. As a first time investor most lenders are not going to be comfortable with a financing scenario that is considered upside down (meaning renovation > purchase price)

If you are talking about ground up construction, there are different nuances. Typicaly you can build your experience resume with being a GC AND being on permits OR being an investor with HUD statments to back up your construction or flipping... I had one deal fall through because even though the investor owned the construction company, he wasn't a licensed GC himself AND this was his first ground up construction. Because he wasn't a licensed GC, he wasn't on permit for any project AND he didn't have any investments of his own. Could the argument be made that he had the experience because of the business he ran?... probably, but the underwriters wouldn't budge and didn't see it that way.

There are options for no seasoning, but there are usually catches. To get 80% cashout, without seasoning, the bar for credit and DSCR is higher AND so is the interest rate. You will need a minimum of 740 and DSCR above 1.20 AND not every state will allow 80% level. There are also optiios where if you know you are going to do a rehab and then refi into a DSCR you can do both with the same lender (still two loans) but seasoning is waived with some lenders. Reach out if you want to talk more.

As long as it is within 6 months of your original purchase date, the rate for delayed finance with DSCR should not be any different than if it was made with original purchase. It's pretty common to do this if you are buying something at auction or with a seller who is not allowing any windows for financing of any sort. You will not be able to get any cash out in this scenario - it is just replacing your cash with a loan in same amount. Not everyone allows delayed financing, so if you hear a "no" keep searching because MANY do.

@Victor Nguyen your income won't matter if you are doing non-QM investor loans like DSCR. What matters is the ability of the property to cashflow, your credit score and your ability to bring a downpayment. The higher the DSCR rate and lower the leverage, the better your rates.

As long as they have at least 20% ownership that would work!