All Forum Posts by: David Bilandzija

@Tony Henderson When talking about private/portfolio lenders, a good number of DSCR programs they offer do not have seasoning requirements on down payment funds. If you need to meet a higher downpayment requirement, you could pull that shortfall from another source and not have to let it season before getting your deal done. If you go the conventional route your downpayment will need to be seasoned.

Rust belt reversal! Refreshing to see this renaissance going down in the Buckeye State

@Ronald Fontenot Jr Like Doug stated, DSCR loans come in several forms. The most common I see investors elect is a 30 year fixed payment option. To qualify for a DSCR loan you'll need to have those vacancies filled and thats where a few steps come into play(more on that below). Factors like your credit profile, experience and cash flow will effect the lending decision and terms offered.

The process is pretty straightforward when working with a property not yet stabilized.  As a mortgage broker I advise my clients to do the following:

1. Acquire the property with a short term bridge/hard money loan, i.e. 12 month interest only, no pre-payment penalty/no income verification/no appraisal

2. Fill the vacant units and get signed lease agreements.  This is referred to as stabilizing the property.  

3. While stabilizing the property you'll wait out a 3-4 month ownership seasoning period depending on the loan program you choose. Requirements differ from lender to lender.  These are current guidelines with two of the more competitive lenders in the space.  

4. Stabilized and seasoned. Ready for refinance - DSCR loan

Good luck, let me know if you have any questions.  

Interested in seeing the end result.  Keep us posted.

Take it a step further and consult with your CPA.  They can break out the numbers in more detail and consider depreciation as a factor in your decision.  If cash flow is your goal then you should at the very least raise rents in the short term.  

Commercial property is over 27 years while residential properties are depreciated over 39 years (or 27 if they were built after 1986). The straight-line method of depreciation can be used for commercial buildings but not for residential buildings.  Straight-line depreciation is calculated by dividing a fixed asset's depreciable base by its useful life.  Consult your CPA or tax attorney.  This is my understanding from dealing with my family's estate.  

Yes and some lenders are reducing LTV by 5% when appraisal indicates subject property is in a declining market.

or a home equity loan like a stand alone, 2nd mortgage.

@Noey Santiago City and State? Primary or investment? 

@Mike Hoang The other posters are spot on.  Money will need to be sourced.  Find a bank with a US banking charter.  I'm sure there are banks in the Vietnam with a US footprint.  Talk to an attorney that can assist with the private lending regulations. 

https://geracilawfirm.com/