All Forum Posts by: Daniel Molina

@Michael Conte 

Similar to what @Scott Wolf mentioned you are going to have to work with a private/hard money lender in order to get what you want. Be aware that you will most likely have to cross collateralize all the properties to qualify. You may run into an issue on value for the property that no work was completed on. Most companies will not give you the ARV since no equity was put into the asset. You should also prepare for higher rates/fees when dealing with the specialized lenders; however, they will let you close in an LLC, close quicker, and require less documentation.

@Jiri B. You are right working with banks can be tough but ultimately what you will sacrifice by not dealing with the "red tape" will be rates and points. I know this was previously mentioned by someone already, however, most lenders charging those higher rates will allow you to scale. These specialized lenders are ususally asset based, meaning they will look at the project and your liquidity, not your income. Based on your experience, it sounds like a worthwhile conversation for you to discover if HMLs or private lenders can help you grow your investment plans. 

Early Welcome to the Queen City! I would be happy to connect once you move to Charlotte. I have been helping investors in this market for the last few years. 

Typically these are only for rental/non-owner occupied homes. 

@David Meier you should look into specialized lenders that offer portfolio/blanket/umbrella loans. These are common names used for loans that will encumber more than one property under a single loan. It would be recommended that you transfer all properties into an entity but this will allow you to refi all 6 properties under a commercial loan which will not show up on your DTI. Almost all of these specialized lenders will not report to credit since the loan is business purpose.

These loans will be underwritten and treated as a commercial loan so the NOI of all 6 properties must cover the new monthly payment and expenses. This will be called a DSCR (debt service coverage ratio). There are plenty of posts and blogs on BP about these portfolio loans, and many lenders on here can offer you some options if you search the market place.

Lastly, if you do not want to cross collateralize all 6 properties there are some lenders who will offer single asset rental loans that will be treated as business purpose as well. Personally, I would look for national or larger lenders since the experience and diversity of lending options will usually be in your benefit instead of shopping local lenders to Denver metro area who may not have the same level of experience purely based on the limited market they service. 

Hope this helps and happy to address any other questions. 

@Tyler Evans for metro ATL I have seen bridge loans under 6 months seasoning at 80LTV through HMLs. Some will do just another 1 year term, interest only payment and no prepay. Others can also offer a 30 year rental program but they would want the project to be complete and it will be determined by market rent.  

@Ari Lester Since you are in Allentown you should be able to find loan and national lenders willing to lend there. I have personally done flips and rental loans there. You can look in the market place here and find good lenders, as the previous poster mentioned be honest with your situation and ask a lot of questions. If it seems to good to be true, it usually is. 

@Tony C. This loan type is actually super common. They are designed either for the experienced investor or the growing investor. I wrote a blog post on here about 3 years ago talking about this exact subject; however, you have received some sound advice. 

These will definitely be treated as a commercial loan and you will be held to a DSCR (debt service coverage ratio) which would ultimately determine the loan amount. It will be calculated by dividing your NOI by your debt service and that will give you the ratio.

Most lenders look for something in the 1.10-1.35x range depending on the program and complexity of the loan. You should also consider that there may be minimum amount of doors and minimum loan amounts you need to achieve on these loans. So if you have lower valued assets you may run into that issue.  

All properties will also need to be vested under the same name/entity so if you have 2 in personal name and 3 in an entity, you will need to transfer the 2 into the entity (assuming you are using that entity to close). 

I can talk a lot more about these loans but hopefully this is a good start. Good luck! 

@Reggie Jackson Since you already own them a cash-out refi shouldn't be too difficult to find. Few things to consider will be seasoning and your overall experience/background. Most lenders will limits LTV based on items like that. - hopes this helps!

I like going to this one in Davidson whenever I can make it. They are local investors throughout the Charlotte MSA and know a lot of people. The event is free to attend and great networking. 

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