All Forum Posts by: Darnell Lockett

Hi @JV Hilario. I see you have experience with SFH STR. Do you have any experience with 5-10 units? Have you managed any? That would be one of the many questions a lender/broker will have for you. As for capital, unless you're going the JV or syndication route...you'll need to bring the capital to the table. Your capital will need to take into account the down payment closing costs and reserves. This is a commercial property so you have flexibility as far as where the capital can come from.

1. You can look at traditional financing such as a conventional loan. You can also look Non-QM loans such as DSCR loans and more.

2. What do you mean by owner-occupied financing? Are you talking about a FHA loan? If so, you can't use that for a commercial property.

3. You can try to raise capital through private sources (family, friends, associates). I've even seen where new investors have taken a deal to their local Real Estate Investors Association (REIA), and had them fund the deal. This obviously was a cash deal.

4. I can't speak on this..I'm down in Miami. 

5. I look at DCR to help determine if I'm cash flowing to my level of comfort. I always want to be at least at 1.30 DCR, which lets me know I'm cash flowing okay. If I can be at 1.50..that's even better. We're in a hot rental market down here so that "shouldn't" be a problem.

I'm always happy to answer any questions or just chat about suggestions. 

Hi @Chase Triplett. Welcome to the group. Congrats on starting your RE investing journey. Feel free to reach out to me. I love connecting. I'm more than willing to share any knowledge I have with you. 

Hi @Osamawen Iyahen. Welcome to BP. It's always great seeing someone young getting started in RE Investing. Attaining knowledge is one of the keys to a successful RE career, which you already seem to have. Have you determined your strategy? What's your initial goals for RE? Feel free to reach out to me. Id love to find out  more and see if there's anything I can do, or any advice I can give. 

Hi @Elise Wharton. Welcome to BP! I hope your journey is going smooth so far. Congrats on getting started. 

Hi @Michelle Harrington. Good question. You got some really solid advice from the comments about how to see if a private lender is legit. I hope you were able to find one that suited your needs. 

Good question @Francis M.. Looks like you got some excellent answers. Do your due diligence with several lenders/brokers. Keep in mind that not all lenders/brokers specialize in the same types of loans. Some specialize in more traditional loans (FHA, VA, USDA Conventional) and others concentrate in the Non-QM space (DSCR, bank statements and more). Others are more focused on private money loans.

I agree that $200 would be too tight for my risk level as an investor, unless its a value add and I know there's room for rent raises. However from my Mortgage Broker perspective there are lenders out there who will go down to 1 or even 0 DSR. As long as the property shows potential to cashflow, they'll service it. It's one of the many appeals for DSCR loans. Again...I personally wouldn't go that low because margins would be too tight, but many investors are willing.

Yes...that's about right as far as 8%, but they're still working as long as myself and our clients stay above 1.35 DSR. We normally like to be between 1.25-1.45. We're doing 70-75% LTV which does make a difference.

IF you decide to close in a LLC...everything you do from a lending perspective moving forward is done in the LLC's name. There'd be no need to put it back into your personal name for anything mortgage or lending wise. 

Hi @Dan N.. First I'm not an attorney, so I'll offer no thoughts about whether putting it in a LLC provides adequate liability protection. As an investor and Mortgage Broker I personally put our properties in LLC's so the my personal debt-to-income ratio isn't impacted. We use DSCR loans which allow unlimited properties that can be closed in a LLC. Conventional loans also allow you to close in a LLC, but you will run into limitations as far as the number of properties you can finance. Closing in a LLC with a DSCR loan is so much cleaner and easier. There's no need to look at or verify any of your personal income, debt, bank statements or anything of that nature. Ultimately...there's no right or wrong way to close the loan However, it's whatever is best for you.