All Forum Posts by: Connor Hibbs

It could be that the property wasn't built yet and it was a land purchase then the buyer bult the home. $5,000 is still pretty cheap for land though unless the land was bought long ago.

Hi @Helena Goyvaerts,

Investing in the US from a different country is fairly similar to investing as a US citizen, but there are a few differences and a few things to keep in mind.

1. Loan To Value (LTV) will be lower than it would be as a US citizen. For long-term loans the loan is usually based off your credit score and the property's cash flow for investment properties. Without having a credit score you can expect to have a 10% reduction on the LTV or loan amount towards a purchase or refinance. Purchase and rehab properties will have a similar reduction, but as long as you have experience within the US, you should still be able to get some pretty good terms. Rates shouldn't be impacted here.

2. You'll need a US LLC and a US based bank account with the US dollar as currency in it. Most lenders will also typically require reserves which would also need to be in US dollars in this case.

3. Be prepared to answer how you will monitor the property. not everyone asks and not everyone will press hard on this, but it's good to be prepared, especially for rehab properties.

4. This isn't a lending requirement but have some boots on the ground other than just the construction company. It never hurts to have an additional set of eyes to look after your property. I'm sure that your contractor will be great, but it never hurts to get some unbiased eyes on the work being done.

If you need help finding financing, I'd be happy to help you find something, regardless...

Happy Investing!

Hi Slaven,

If you're looking for a DSCR loan then this should not be an issue to get for you. If you're looking for a bridge loan or purchase and rehab loan then this is not available. Short term loans are meant for a quick transaction or renovations that will then be refinanced or the property sold. The short term loans come with higher rates because they are typically interest only payments and not meant to be held on to for long. They're to "bridge" the gap from a purchase or refinance into a more long-term solution.

Commercial rooming house in CT! It’s 13 units. Single room occ.

Who can finance it for my client?

Address: 906 Judson Pl, Stratford, CT
Purchase date: 10/16/24
Purchase price: 715,000
Amount Owed: 564,000
Value: 750,000
Unit Count: 13 - see card: https://gis.vgsi.com/stratfordct/Parcel.aspx?Pid=9146
Current Rents (each unit): 11,800
Market Rents (each unit): 13,000
Annual taxes: 10,676
Annual insurance cost: 7500 est
FICO score: Bor 1: 695, Bor 2: 670
Number of purchases in the last 3 years: 10+

The agent's compensation is negotiable and 6% may be more common if that includes the buyer's and seller's agent, but if the 6% only covers the selling agent, then that's a greed reach especially considering it's a 2m+ sale price. Is whatever they are going to do worth 120k?

Hi Jewell,

The first thing is to see what is lacking the most in the property since small upgrades will have the biggest impact in the areas of low quality to start. Aside from that the biggest value add areas I see are as follows: Kitchens, Bathrooms, decks/patios (if added), additional rooms/baths

Kitchens and bathrooms tend to be the go-to, but all of those can help you get the most bang for your buck. just keep in mind that if the area is already of high quality, then it may not be the best area to spend the money vs something that is blaringly in need of an update.

Hi Levi,

The first question is if this is currently on a short-term loan as the 3,500 over 4 months is fairly significant and you may want to look at refinancing sooner. Also, while you can get up to 80% cash-out with a 720+ FICO and a 1.0+ DSCR I don't see why you're being capped at 70% LTV currently.

An option for you could be to go with a DSCR loan with a reduced prepayment penalty period so that you can get funds soon and if you want to refinance next year or the following due to lower rates or wanting more LTV than you're able to do so.

You should look at this one with the mindset of:

1) What would my expenses be once I refi vs what they are now?

2) Is the extra LTV on cash-out worth the increase in interest rate and if not, how much LTV would I need to go get the next property?

3) Will I be increasing the DSCR of my property over the next 4 moths? If so then that may help to bget better terms in the refinance.

Hi Doug,

Having a good property manager or real estate agent in the market of your properties can be a great help when it comes to renting out the property. They'll be able to list it at a competitive market rent value and will likely have possible tenants in mind. They'll also be experienced in the vetting process which can be a huge help down the line.

Once you have the tenants covered then you can refinance into a DSCR loan. Depending on the cash flow and your FICO, you should be looking at 75% or 80% (80% will have a significantly higher rate than the 75% but depending on your strategy could be worth looking at) of the new as-is value that you can get to pay off the rehab loan and get some cash back to go after your next property.

I'd recommend looking at some of the BRRRR articles that have been written in the BP forums for some additional info on this process.

Thank you for this Roger. This is very well worded, and I believe covers most new investors' concerns and questions. 

For Nicholas; it depends. If you have a lower rate locked in currently and have no immediate needs for additional capital, then you should wait. If you need additional liquidity for other deals or if you could get a lower rate now, then it could make sense. Something to keep in mind though is that with the DSCR it is a new mortgage which entails higher closing costs as well as paying off any existing liens. It really is going to come down to the current state of your property and if you have any needs for additional liquidity.

Hi @Marjorie Deprez,

What you're describing is a Delayed Purchase. Assuming that you're buying a turnkey property, the delayed purchase is meant to be for borrowers who have very short timelines to be able to close, have the money to purchase up front, but still want to leverage their cash. Basically, what you'd be doing is reaching out to a lender and letting them know "I'm planning to buy 123 Main Street in 3 days with cash. I'd like a Delayed Purchase to get some funds back on it." It's priced just like a purchase without needing a downpayment. This also works for properties that need rehab too.

*Keep in mind that these loans will be based off the lesser of the purchase price and as-is value. If you purchase at a discount, then you'll be capped by your purchase price, not necessarily the as-is value of the property.