All Forum Posts by: Daniel Molina

@Chloe Cheng Early Welcome to Charlotte. I invest in Monroe - but do a quite a bit of lending in Gaston County. I would also agree with @Susan Sutherland Belmont is a fantastic spot for investments...strong rentability, great flip opportunity and new construction since it's one of the few areas close to Charlotte you can still do find decently sized lots. 

@Natali Goenaga First off, very exciting that you are making the move to get into REI. As for real estate agents that are investor friendly, there are plenty out there. I know a few that are great in certain markets vs others or finding the right price point as well. Keep that in mind and be open with whomever you decide to work with.

I would also start looking into lenders. The market is moving quickly (homes in charlotte are going in less than a week when under certain prices) so you typically can find yourself in a multiple offer situation or a "who can close fastest". Depending on your plan, you should be setting up conversations with private lenders, HMLs or even conventional lenders. Best of luck to you and feel free to PM me if you have any other questions.
  

Almost all areas surrounding charlotte are doing well but it depends on what type of investor you are. I haven't done much research myself but a significant amount of my clients who BRRRR or target rental investments go west towards Gaston County. Low property values but good rent collection because of proximity to highway/city. Same holds true further south in Monroe. Both are lower end neighborhoods but rents are high. Flipping I would stay matthews, concord, kannapolis, mooresville since there are a high number of home owners in those markets.

Anyone in SC i would caution if you plan to hold them as rental. There are taxes applied to absentee property owners so be sure to calculate that into your holding cost. 

@Bhargav Hirapara You have a few options here. I personally like the route of a credit union assuming they were willing to balance sheet the loan as a blanket. Some play ball and others only want to use conventional options so definitely worth calling around. The other options is using specialized lenders. you can do a blanket or individual loans and it gets treated as a commercial loan so typically non-recourse, borrower is an LLC and based of DSCR/cash flow. These loans do cost a bit more but close quicker as well.

@Robert Calabro If the property was recently renovated and already stabilized or the loan can be supported by market rent you should be able to get a longer term loan with better rates. HML and private lenders alike are offering loans based on DSCR because the general investment market has a greater appetite for cash-flowing rentals right now. I would definitely shop it around since those sound high for a rental. Depending on market and qualifiers I have see 6.25% and for rental loans.

@Samuel Iddings I would agree with what everyone is saying so far. You need to have a plan and see what works best with you. Every lender will have their own strengths and weaknesses but they should ultimately matter if it works with your planning. For example; you identify as a rental property investor. So let's assume you find a great house but the seller is only willing to accept cash or hard money because they need to close within 2 weeks or less. If the house is a good deal and you are comfortable with the rates your HML will offer then jump on it. If you feel the carry cost will eat too far into your profit then don't take the deal.

Regardless if you are flipping, buying turn-key rentals or do a BRRR Strategy you should always keep the following in mind:

• - Rate
• - Origination costs
• - Term (12 months, 24 months, 360 months, etc.) 
• - Pre-payment penalty or exit fees, if any
• - LTV/ARV financed
• - DSCR/cash-flow requirement

I would also encourage you to ask if they are a direct lender, typically deal/process flow and what happens if you need to extend the loan. This should give you all the costs you would need to account for deciding if using a specialized lender is right for you. 

I am not sure if comparing what was offered in Jan of this year makes much sense. There has been a huge shift in markets with COVID and some lenders no longer exists. With that said, things are definitely balancing out again to pre-COVID figures. 

@Kim Carter I would also use the market place here or look up lenders on a more reputable site than FB. I would even check out Scotsman Guide if you are looking for a lender makes you more comfortable since they would have a marketing budget to advertise with them; helps to confirm they are a legitimate lender.  

@Gregory Schwartz I agree with the advice that was given. You should look into a portfolio/blanket rental loan. This will encumber all 5 houses in a single note.

Typically these loans are for a limited term like 5, 7 or 10 years so a balloon payment is due after the term OR you can do it as a ARM (5/1, 7/1, 10/1) where the rate will adjust after the fixed period.

While you can get a release clause you should also know the pre-payment penalty on these loans since each house you try to release will be subject to any penalty. These loans are also contingent on the DSCR requirement so if they are not cash flowing enough you should prepare for a reduced loan amount/LTV.

I am very familiar with these loans and I would be happy to answer any questions.

@Frank Chirkinian are all 7 on one parcel, that 3 acre lot? Or was the 3 acres already subdivided and across a two or more parcel numbers?  

@Royston Lobo Correct that is for owner occ...tons of lenders stopped doing second homes or investments and those that are; are charging more bc of the risk. Double check if they are still accepting those loan since the QM world has adjusted a lot and some shops that sell to Fannie/Freddie stopped doing investment temporarily. 

I don't know much about state of the conventional world, just have friends that do it for a living. I am on the private/investor side of lending.