All Forum Posts by: Erik Estrada

 Hey Harish, 

What kind of terms are you seeing so far?

 Hey Eric, 

Let me cover a few things. 

1. If the property is currently delisted, there are lenders that do not require a seasoning period to finance you. They will however go based on the lower of the listed price or appraised value (unless you are able to get an exception approved) 

2. DSCR lenders are only going to underwrite this asset as an STR or LTR. Do you have any other short term rentals owned for 12 months? Lenders are going to want to see experience to use Short Term Rents.

3. Are you able to get an extension on your hard money loan? Is that $1,600,000 value a conservative estimate? What was it listed for and how long was it on the market? 

4. Is there an HOA for the two condos? Is the property conforming to the current zoning? Do you have a certificate of occupancy and a rebuild letter from the city to verify that the property can be rebuilt as is?

 Hey Matthew, 

There are several lenders that can do this. But they are usually not a strict wholesale lender where they do not have a retail shop. 

From the top of my head, you can do this with Lima One, Easy Street, Kiavi, and other big box lenders. They are just more strict on the DSCR if you are trying to finance them on a portfolio. The properties below $100k will be difficult to finance on a portfolio since most lenders are valuing each asset individually (not the entire portfolio)

You may want to try a local commercial bank first to see if they are able to value the entire portfolio, not individually. 

 Have you tried calling any local hard money lenders?

I have seen 85% LTV on a rate and term, but will be at a very high rate.

Cash out I have only seen 80% LTV max. Likely will decrease given such market volatility.

Also, don't shy away from co-brokering. 

You'd be surprised how many brokers have difficulty placing their loans. If you are experienced, you can easily help solve someone else's problem and get it to the closing table, and make your cut. 

It's just the market. Be patient and nurture your existing relationships. This is why it is extremely important to be very ethical in whatever you do. If you do good, those same clients will refer you to others and you won't be battling over rate shoppers. 

Referrals are the creme of the crop. 

 I think the most important aspect, and a lot of first-timers do not really consider, is working with a reputable lender. 

Sure the rate is important when it comes to housing affordability, but it's not everything when it comes to closing. There are MANY lenders that can offer competitive rates when you are calling and shopping around, but it's no good when you pull the trigger, order the appraisal, go into underwriting, get the run around and then end up a few days before closing, having to close on terms that are vastly different than what you were anticipating. And sometimes, it is far to late for you to change lenders or fight it unless you are OK with losing a few thousand dollars on your EMD.

Most lenders are going to offer you basically the same thing. Sure some of them might cut their compensation to make it work and get the deal in, but you honestly don't want to work with these kind of folks. They are brand new LOs with little experience, hoping to get a nice 1st commission. I know this, because we ALL started this way. 

You want to work with someone that can provide you some sort of value. Anyone can take a loan application and submit paper work. Not everyone, can guide you, ask you the right questions, structure loans according to your financial circumstances, and prevent you from wasting time, and losing a lot of money. 

7.25% is a great interest rate for the loan you are looking for. You MIGHT find a few other lenders that do a hair better, but it will require a lot more paperwork and hassle than you think. Sometimes it's better to shop for average rate, and superior mortgage company, instead of cheap rate, bad mortgage company. 

If you are looking to get value from the 4-plex and the detached SFR, it will likely be considered a 5-plex by the lender and appraiser.

But this will ultimately depend on what the current zoning is and if the county recognizes this property as a 5 unit. 

You will likely encounter a few issues 

1. The lender may require you to have a Rebuild letter if the current structure is non-conforming 

2. Depending on how the appraiser treats this, they may use either the sales or income approach for value. If they use the sales, it may cut your value. 

3. Your terms will look vastly different treating this as a residential 4-plex compared to a commercial 5 unit. It will require finding a niche lender that is okay with accepting the structure as a commercial 5 unit or or residential 4-plex. 

I would advise getting as much concrete information as possible. Ask for certificate of occupancy for the detached SFR, Check with the city zoning regarding the rebuild letter if the property is non-conforming.

 They have 3.7 stars on Google. Does not sound so simple and straight forward to me. It takes a lot for a client to leave a bad review... Highly doubt they are haters or spam reviews. 

I have seen their terms. Low fees, low rate, but change it right before closing. It's a Non-TRID and a Business Purpose loan so there is not much you can do. 

I don't know why people fall for this. It's like a dead giveaway from a simple google search.