All Forum Posts by: Dylan M. Davis

Bridge loan would be the best, a 1st position lien with rehab funds held back. You'd refinance into DSCR loan after that. Make sure your lender knows what they're doing. This doesn't sound too complicated but you want correct structure for this to make the refi easier. Bridge loans are simpler than a credit line, the payment is monthly interest only (principla * rate/12) rates are 11-13%

Depends on if the property needs work! Consider your exit strategy as well for private money. They'll probably offer a short term loan upfront often called a 'bridge loan' to value add and then refinance to stabilize. Make sure your lender is competent, nowadays a lot of lenders are shutting their doors or not offering what they used to be able to. 

You need a bridge lender that will issue you funds to draw down on an complete the renovations. Once the work is completed after 3 months seasoning you can do a cash-out refinance into a 30 year product to stabilize or if rates scare you, do a bridge cash-out but leverage is reduced. You can also extend the 1st  bridge mortgage 6 months at a time. The mortgage officer probably is discouraging you from seeking private money because he won't get the business but high rates can be dealt with if you have the right lender. 

 That's great for those lenders! What I'm saying is market for the current time we're in. It's not 2018, being conservative is the best option. 

 Some things you should know when looking at a refinance: 

1. You need to know your exact score. 680+ is the minimum. 720+ will give you the best rates for 30 yr fixed.
2. You need to know your median market rent.
3. Your comps need to be within a mile, and within 10% of the square footage of the subject property.

Let me know if you have any questions :)

85-90% LTV as a first-timer would not be market. With no experience you'd be pressed to get it done at all but if you have good credit and liquidity I would say your max leverage would be a total loan amount (purchase + rehab) of 65% of the ARV. which would shake out to be like max 80% of purchase and 100% of rehab costs.

For us floor rates have come down.. No more 5/1 or 10/1 arms. our floor rate is 6.875% for cash-outs the floor is gonna be 8%-8.125% So what you're getting could be high depending on credit and the DSCR, etc...

Would love to hear the story. if you're in the market for a secure, efficient lender! Have you been under contract for 8 months? 

I'm a lender. We're doing cash-outs between 3-6 months of ownership at new appraised value. Qualified on property income! This is a new change for us.. We can cash-out at <3 months of seasoning. Max proceeds would be purchase price + verified rehab costs invested. Floor rates are around  8.125% 

Private money would be your best bet, but most lenders are requiring 12 months trailing income verification to take that rental income in their DSCR analysis.