All Forum Posts by: Dana Powell

@Tarik Turner My goal would be to refi Prop 2 60% LTV at 6.75-7%, netting a $180k cash out. For 1st 5 years, the monthly PI would be $2800 on a $480k loan; current gross rent income is $3600.

I would then use $128k of Prop 2's cash-out to reduce the $1.208 principle of Prop 1 to $1,028,000 and acquire a 60% LTV at 6.25-6.5%. For 1st 5 years, monthly PI would be $5850; current average gross rent income is $9800.

A couple of notes:  Prop 1's income is on a schedule C, not E since income up to now has been from short-term rental (2-4 month occupancy).  This lender allows for leases as short as 3 months.   Although, if I could get better terms from another lender who would require annual lease, it wouldn't be a problem to find long-term tenants paying $8500-9,000/month.

Not sure if it is advantageous to inform the lender that I would be cashing out the equity of 1 property to pay down the debt on another property.  As the originator, he benefits, as he gets both deals, but would he want his buyer of Prop 1's note to take on unnecessary risk?  

Another option would be to take $250k of equity from 1 or both properties or get a bridge loan (?) and build an accessory dwelling unit (ADU) on Prop 2 which would generate about $2400/month gross rental income, bringing that property's income to $6,000/month. The ADU would be ADA compliant and be my aging-in place residence years (hopefully) from now. Then refinance Prop 2 to pay off loan. But perhaps I can do that 5 years from now, when it would make since to refi these loans after the interest-only period?

Frankly, it's been a struggle to make payments, maintain the properties and I'm kind of burnt/stressed out. The new construction would take about 18 months and I have no experience and little self-confidence in that area, TBH. Plus I'm kind of overwhelmed at how expensive all of this loan restructuring/new build seems. I come from a working-poor, paycheck to paycheck background and have to constantly remind myself that one must spend money to make money--but this seems like SO MUCH money! BTW, I also scaled back my consulting work, which paid very little, so that I could focus on all this. My goal in 2-3 years is to travel via airbnb for months at a time domestically and internationally, living off of my rental income (as well as build-up my IRA which I depleted paying off cc debt used to upgrade properties, e.g. adding bathrooms, gut kitchen, and yes, pay a few months of morrgage payments).

Still with me?  Thanks for reading and listening!

Thanks Jared.  What do you mean by "b/c those numbers are debt servicing either?"

Thank you Benjamin.  When I initially challenged that fee, Lender did say that he may be able to lower it but  first would need all the paperwork done, credit pulled, etc.  By then, I'm practically committed to him!  

Thank you Shaun. I thought so too. The lender is a friend of a friend and has an office around the corner from Property 1 so I thought a relationship could be developed. I was under the impression that asset-based financing is expensive and hard to find. My current lender wants 12 months of PITI and 43% DTIto convert from owner-occupied to investor loan, and I don't have either. I'm not sure where to find trustworthy lender, whether I should own and finance properties as an LLC vs individual with umbrella insurance, etc. But I'm going through BP forums and learning a lot! BTW, my properties are in DC.

Hi All. Newbie here and would like some advice. I have 2 rental properties both on 1-year ARMs at 5.25% amortized over 25 yrs that I need to refinance. My credit score ranges from 650-705.

Property 1

$1.7 million value
$1.208 mill mortgage
$9800/month rental income

Property 2
$800K value
$277K mortgage
$3600/month rental income

My goal is to take cash out of Property 2 to reduce the principle of Property 1. My only income is the rent and about $25k in consulting work.
A local originator has quoted me the following for a no-doc loan:
Closing costs per property:

3% Origination fee (he said he may reduce this since I'm refi 2 loans)
$750 legal doc fee
$2950 servicing fee

Starting Rate on a 30 yr fixed with interest only 1st 5 yrs:

Hi All.  Newbie here and would like some advice.  I have 2 rental properties both on 1-year ARMs at 5.25% amortized over 25 yrs that I need to refinance. My credit score ranges from 650-705. 

Property 1 

$1.7 million value
$1.208 mill mortgage
$9800/month rental income

Property 2  
$800K value
$277K mortgage
$3600/month rental income 

My goal is to take cash out of Property 2 to reduce the principle of Property 1.  My only income is the rent and about $25k in consulting work.
A local originator has quoted me the following for a no-doc loan:
Closing costs per property:

3% Origination fee (he said he may reduce this since I'm refi 2 loans)
$750 legal doc fee
$2950 servicing fee

Starting Rate on a 30 yr fixed with interest only 1st 5 yrs:

Adjustments: