All Forum Posts by: Connor Hibbs

Hi @Deal H.,

 Both are good options, and the true answer is which properties become available to you and which strategy best fits the properties you can find. 

The Turnkey properties will start showing returns immediately once they are rented out but has lower returns than a BRRRR property would. BRRRR properties will take more up front capital to get started but if done correctly they can yield larger returns.

Getting a partner to invest with would make more sense on your first BRRRR since the rehab processes if heavily based of experience for your LTV% and your rate, where the turnkey will just be based off your FICO and the cashflow of the property.

Hi David, I'd be happy to help here. Section 8 tenants are not a problem, and we are able to lend in Milwaukee. As long as the property cashflows then we should be able to offer 85-80% of the purchase or 75% in a cash-out refinance. 

I'll send you a DM if you'd like to see what rough pricing would look like.

Hi Matt,

15% is the lowest downpayment that is currently out there for DSCR, and it does come with a significantly higher rate than a 20% down DSCR. You'd likely be looking at rates in the low to mid8's depending on your credit score if you were to go with the 15% down.

The higher LTV loans can be found in bridge loans and rehab loans since they are short term and often the value of the property increases so lenders can scale off the ARV.

Hi John,

I'd ask your agent if they've worked with other investors in the area as they may have some contacts that they've had good experiences with. An additional place you could check is at your local REIA as that tends to have not just other investors, but also other contractors who specialize in working with investors.

Also, as a side note, if you're looking for financing, I'd be happy to give you some rough terms so you can get an idea of what is available out there for a first-time investor. 

Bathrooms and kitchen upgrades tend to add the most value relative to the money spent on rehabs. It sounds like the contractor thinks this would be relatively easy add from what you've stated so I'd recommend doing it. This will also help when marketing the property for sale or rent.

At the end of the day your realtor is going to be more knowledgeable about the market you're in than I am, and how this would help your property, but based off what you've said I think it'd be a wise investment.

Hi Ricardo,

When going with a lower downpayment you'll leave more of your capital available and liquid should you find another potentially great investment property. You will also have more cash on hand to complete rehab projects in fewer draws should it be a rehab loan.

When using a higher downpayment you'll be keeping higher equity in the property and can often get a lower rate with lower LTV (particularly with DSCR loans). You'll also be able to take out more on a refi down the line should you want one.

In the end it is up to you for your strategy, but you'll always want to make sure that you're at least relatively liquid enough to go after opportunities. 

DSCR Loans are for investment properties only but have quicker closing times and far less docs required to close than conventional. On a DSCR Purchase, with a decent FICO you'd be looking at 20% down for anything 1-4 units.

Hi @Neal Daftary,

Getting 20% down depends on which type of loan you are looking for but shouldn't be too difficult. If you are looking for a long-term loan then you'd just need a 700+ FICO and a property that cashflows. For rehab loans you'd probably want at least 1 exp to get 20% down.

If you have a specific scenario I'd be happy to give you a rough quote.

Hi Jenny, I think it can be ok to compare a bit between what different brokers offer, especially if you think that a broker may be overcharging you, but there is also a strong importance to forming a relationship with your broker. When you form the relationship with a broker that you've done several deals with, they can often get more exceptions done for you or be more flexible with their terms and or the options that they can find for you. There are lots of lenders out there that specialize in different things and have different workarounds. by working with the same broker, they'll understand where your priorities lay and since they have a better understanding of your experience, they can push for exceptions that wouldn't normally be approved.

I myself am a broker so I may be a bit biased here, but if you do feel that your current broker isn't very good or that they are overcharging you then you can certainly explore other options. Otherwise, it is worth forming that relationship.

House hacking is a great way to get started.