All Forum Posts by: Guifre Mora

@Michelle Fabro your welcome

@Sam Burchyett no.

It’s the same as doing a cash out refinance and using the funds to purchase another property. That initial downpayment is financed.

@Michelle Fabro

Property details:

Cost of purchase

As is value

Appraisal if any

After repair value

Comparison of Market rents

Scope and budget of rehab work

Purchase agreement

Escrow instructions if any

Your personal info

Schedule of RE owned

Proof of funds (downpayment, closing costs & holding costs)

Real estate resume

Your FICO scores (some ask some don’t)

Statement on Exit strategy

How much are they lending you on the purchase 80/75/70%... (rehab funds usually will be covered 100%)

@Roman Adam Robison same ratios and qualifications as a SFR. But with some specific items for Multifamily that new to be reviewed.

@Benjamin Seibert yes duplex qualify for commercial loan.

Commercial loan is a big umbrella of Mortgage products.

To simplify, any income generating property is commercial. (Wether they make money or not)

It can be owner occupied or not.

Lenders will allocate their funds and diversify where and for how long they lend.

They have a broad selection of loans or will be a niche lender where they focus on specific properties loan amounts and terms. (Loan length)

For your scenario cash out refi lenders will allow your LTV to be 75% and below. With options available for 5, 7, 10 ARM 20, 25 y 30 year amortization. I rarely see 80% LTV this could happen but exemptions could play a factor and how hungry the lender is. (They could be having lots of $ to lend and could be trying to push that money out).

ARM are very forgiving on rates and can be amortization to 30 y. If your rents can pay pack in 5-7 years the loan it can be beneficial as rates tend to be on the lower end also by paying points rates can be very attractive again your rents can take on the loan freely.

Now do take in consideration that rates, LTV are on a moving scale. FICO, location (city & State) and DCR (Debt Coverage Ratio) @ min 1.2 will play a factor.

Analyze how much 5% is in your deal and if the rate and term will actually benefit you on the long road and save you money by leaving your 5%.

Do consider closing costs will be based on the loan amount.

Shop for around might take time to really dig for a good lender or get a commercial loan broker, they will already do the heavy lifting for you and can get you different quotes quite quickly as that have already stabling relationship with them. (Some lenders will not deal with clients direct).

Good luck if you have any more Q or need detail explanation on what I wrote feel free to connect or PM I’ll be happy to answer all questions.

@Colton Wasieleski once you reach your limit your reached it. LLC are till being owned by you and you have reached the limit and the commercial loan world is the new frontier for your RE needs.

@Josh Ledbetter a restaurant might be a cool option

@Josh Taylor there are specialized lenders in the Multifamily space. They have plenty of options and they have options to fund your rehab costs.

Getting a quote from these lenders is a matter of packaging your deal the right

@Vicky L. You are in a good spot financially. The detached unit will add value to it as is income potential.

You will be looking for a Fix and hold Loan.

Hard Money Loan, long term rental.

There are 3 ways to attack this.

1- Hard Money Loan. Interest payment only you can get funds for rehab. You would be paying high interest and upfront points and a ballon payment at the end of the term. Month to month is easier on the pocket. Fast closing not a lot of questions asked. After completing project refinance to a long term loan.

2- Fix and hold loan. Similar to hard Money but little more underwriter guidelines but you don’t pay on unused rehab funds until used but the funds are secured. This loan would wrap into a rental long term loan.

3- Long term rental loan. Use your funds for the rehab. Stay as is when rented or refinance to pull cash out 75 % on the ARV.

@Payton Reid remember loans would be paid by your tenants at the end.

Scale.... split your 250 into 25-30% down payments to get good rates and hold the properties. Some will yield immediate cash flow some won’t but if you are financially in a good spot pay them off with the rents in a few years the ya are paid off your money and equity grows exponentially.