All Forum Posts by: Hawazin Alabbasi

Quote from @Hawazin Alabbasi:

Quote from @Jack Martin:

All I am doing these days are DSCR loans; think of it as a stated income loan. You don't need tax returns or W-2's to show income. You just need rental income, (I can even use a rent survey if it is unleased). I can pair the DSCR with a 40 yr. interest-only loan to increase your cash flow.

 Hi Jack,

Can you please explain more about the rent survey? How did you design it? what questions are included and who did answer your questions? 

 Sure! A rent survey is supplied by the appraiser who gathers rental details for comparable properties as the subject property, much like comparable sales. Lenders can use the rent survey in lieu of lease agreements. This works in case the subject property is in mid-rehab.

Quote from @Hawazin Alabbasi:

Quote from @Caroline Gerardo:

@Hawazin Alabbasi 

$3,825,000 loan amount PITI is $34900 monthly

Your monthly rents stated are $22,098  it does not cash flow at 75% 

$2,295,000 probably maximum loan as PITI is $23000

Over 8 units is commercial. Loans are due in full in five or seven years. At the end of the five years you must refinance or sell. This is why many commercial office/retail/multifamily are in trouble- the rate is high and hard to cash flow.  No I do not mean "you need to multiply cash flows..." 

Value for commercial weighs on the rents, then Class, then comparables which is different than residential. If this is a purchase you need a huge down payment, if a refinance then your valuation is way too high and won't appraise for $5,1 

That's right, but also there are loans for the down payment. I think is better to start with a small investment, then go up.

 Commercial is not going to allow a second trust deed loan. Any loan payment goes into the cash flow, rents are so low in your example - compared to the price it cannot work, it will only make it worse.

All I am doing these days are DSCR loans; think of it as a stated income loan. You don't need tax returns or W-2's to show income. You just need rental income, (I can even use a rent survey if it is unleased). I can pair the DSCR with a 40 yr. interest-only loan to increase your cash flow.

Quote from @Hawazin Alabbasi:

Quote from @Jeff S.:

One point is one percent of the loan amount.  On a $100,000 loan, one point would be $1000.  Two points would be $2000.  Etc.

Points are typically paid at closing when your deal funds, @Hawazin Alabbasi.  Your lender would wire $100,000 to Title and you would wire $2000. (for a two-point loan).  The lender would then receive your $2000.

This is sometimes a silly way to do it, so many loan documents allow the lender to "net fund" the loan.  In this case, the lender could just send the  $98,000 and you would send nothing.  Same result.

Note that points increase your annual percentage rate.  In the example above, the lender sent $98,000 but you owe $100,000.  Your payments would be based on the $100,000, not the net $98,000.

Private/Hard Money lenders are generally free to charge what they want -- only constrained by the market (you can shop around and say no) as well as any state usury restrictions.

Thanks for your reply, @Jeff S.
How the payback for the loan will be scheduled? Do the lenders set a specific time to start paying back the loan? For example after 6 months from receiving the loan? Or do you need to pay immediately after you get the money like a credit card?

most loans payments start right away and or may collect the first payment or a couple at closing. there are loans that are accrual base.. I do a lot of these.. interest is paid at the payoff. thereby allowing my clients ease on monthly cash flow so they can scale faster.. but want to also say I only do this for very experienced repeat clients of mine.

@Hawazin Alabbasi generally you need to start making payment right away. However the first payment is often included with the settlement costs. So the first time you need to send a check is after 1-2 months and then every month. 

One point is one percent of the loan amount.  On a $100,000 loan, one point would be $1000.  Two points would be $2000.  Etc.

Points are typically paid at closing when your deal funds, @Hawazin Alabbasi.  Your lender would wire $100,000 to Title and you would wire $2000. (for a two-point loan).  The lender would then receive your $2000.

This is sometimes a silly way to do it, so many loan documents allow the lender to "net fund" the loan.  In this case, the lender could just send the  $98,000 and you would send nothing.  Same result.

Note that points increase your annual percentage rate.  In the example above, the lender sent $98,000 but you owe $100,000.  Your payments would be based on the $100,000, not the net $98,000.

Private/Hard Money lenders are generally free to charge what they want -- only constrained by the market (you can shop around and say no) as well as any state usury restrictions.

@Hawazin Alabbasi

Points are charged upfront and a point is a percent

So if it’s 5 points that is five percent of the $100,000 loan = $5,000

Yes they are taken upfront and can be anywhere from 1-5 points

@Reinier Napoles

Loan amount is amount after down payment

Say you pay $120,000 and out $20,000 down. Your loan is $100,000. Points are based on a loan amount of $100,000 (not purchase price)