All Forum Posts by: Dustin Tucker

Hello Yishi,

I deal with 1st position mortgages on New Construction, I would say that investor capital can be all over the place in terms of rates.  The main things to consider, are the following:

1. Cost overruns, who comes up with the money, how is return effected?  Once your construction loan starts, most banks will not extend any more credit once construction has started.  

2. How much interest reserves are there?  Unless you are building Rental units, the SF Retail market construction market is not doing well, hopefully your builder is borrowing money at sub 10% interest rates.  4 years ago, a lot of builders were only factoring in 3% for total loan costs, I would think that the carry costs would be 10% or more currently.  

3. Like you said in the post, if you can complete the houses, you can rent them out, but that leads to the next question, Do they cash flow? There are DSCR loans that go up to 75% LTV on cash out, and 80% rate and term refi's, which from a builder's perspective are the way out when you can't sell the properties. I think the most interesting part of the DSCR loans is that they are actually going negative on the DSCR, for example I have 2 lenders that will go below 1.0

4. Is the land owned outright or are there loans in place.  This is the #1 reason why most builder's fail, if they own the land, the carry costs are relatively low, but the moment they tap into the land equity for additional capital, is usually the moment they are finished.  I would make sure, I had the 1st mortgage on the land with my investment, for 2 reasons, 1. This ensures that I have something in case **** hits the fan. 2. You make sure that there aren't any loans take out against the land, ensuring that you are safe in your investment.

Hope this helps.

Hello Travis,

There are so many variables, I think it boils down to the following:

1. Do you have a budget?

2. When someone has warm leads, are they selling exclusive leads? or are they selling them to more than 1 wholesaler/investor.

3. What do the leads cost, are they worth it?  at $5/lead, do any leads close at $100/lead, do the leads close, it might be worth far more for good leads, than just burning money on cheap leads.

4. Have you looked into Free leads, like Foreclosure sales, Bankruptcy Filings, Divorce Filings, these are all places you can find leads for free by doing a little work yourself.

If you want to fix and flip or buy and hold any properties, we can fund up to 90% of the purchase price, and our rental rates start at 5.3%.

Hope this helps.

Hello Sean,

Have you seen a tool Airdna?  It allows you to see all the Vacation Rental Market, occupancy rates, etc. Its the best place to figure out your Vacation rental numbers.

If you are looking for a great Rental Property loan, let me know, our rates have dropped to start at 5.3%.

Thanks,

I'm going to go out on a limb, and say the dumb money keeps buying treasuries like they are going out of style, which continues to push the rate lower.  The fed's cut will be too late and they will be playing catch up, as defaults and Job Layoffs continue to mount.  Additionally, we will see the unemployment rate tick up another .5%, to 4.9+ maybe even over 5%.  

Hello Kaleb,

Years ago, I went to a Mobile Home Park University seminar, and I remember a very similar question.  The answer is to put an add on Zillow, Craigslist, or anywhere else, where you can see what the market is.  Once you run your add for a week, you can see how many leads you have and can create a proforma for how long the lease up will take.  P.S. Use chatgpt.com to write an amazing add, its free. 

Hello Shad,

I think there is always a time and place for flipping, but I think you build long term wealth with buying rental properties. The quickest way to get to multi family investing is to start with duplex, triplex, and quadplex properties. Financing for 5+ units is not very good right now, however there are ton of lenders including myself than can fund up to 75% LTV on a 1-4 unit property. Plus interest rates for the rental loans are now starting at 5.3%, and I expect those to drop more in the next 6 months. For example you can do a fix and hold loan on this property https://www.zillow.com/homedetails/2024-Edgmont-Ave-Chester-..., (I don't know the philidelphia sub market, this might not be a deal) $125,000 Purchase, $75,000 rehab, if you can get an appraisal for $300,000, you can get all your money out, and probably cash flow $500+ per month.

If I started investing again, I would have started with getting my real estate license.

Happy Hunting!

Hello William,

I think that if I look back at the houses I flipped, we would have made infinitely more money if we had held on to some of them and gone with the rental route.

Today, DSCR roans are starting to come in under 6%, at my company our lowest DSCR Rates are 5.3%, and I expect them to continue to drop. A DSCR loan is a huge advantage to real estate investors, 1. You don't have to have hard pulls on your credit, which allows you to do more loans. 2. When you get a rental property, you have not just the cash flow from the rental income, but you also have the Principal payment which is also your profit. 3. You have many tax incentives to rent vs Flip, in Depreciation. 4. Once your rental property has increased in value, or the tenant has paid down the equity, now you can refinance the property, pull cash out, and that money is tax free.

Hope this helps,

Dustin

@Will Clark

Hello Will, I started with about the same amount of money, #1 invest in yourself, get educated on how to buy sell and look for real estate.

#2 look at tax sales and resales in rural counties, believe it or not, there are are lots that you can buy for $500,

#3 make sure you have a steady source of income, at some point you will want to refinance properties and you need to be able to show income to do that.

Hey Paul,

Wishing you best of luck with your first REI prop.

Questions you have above are legit, I don't want to make short story long I see you already understand some important stuff just would love to tell you to be careful and ask about potential foundation issues and wiring. 

Thank you very much, have a great rest of the day.

Hi Jeff,

Depending on other factors it could be 7.5% all the way to 15%

Possible prepay penalty when the borrower wants to payoff before the end of the term.

Feel free to let me know all your questions concerning the subject.

Best Regards