All Forum Posts by: James Stout

• Status today: A two-year cap on rental assistance has been proposed at the federal level, but it’s not law. It appeared in the administration’s recent budget policy push; any change would still need to make it through Congress and implementation.

• Who would be affected (as proposed): Drafts/discussion center on non-elderly, non-disabled households; seniors and people with disabilities have been described as exempt. Independent analyses warn of higher turnover/eviction risk if a hard cap were adopted. 

• Investor takeaway right now:

  1. Underwrite to today’s rules (no cap), but run a sensitivity case for higher turnover (make-readies + vacancy every 24–30 months) in voucher-heavy units.

  2. Favor properties that cash flow without the voucher (voucher = upside, not lifeline).

  3. Build tenant-mix flexibility: finishes that hold up, durable materials, and locations that attract both voucher and non-voucher renters.

  4. Track your local PHA updates—some agencies have experimented with time-limited pilots before; local admin practices matter. 

Bottom line: I wouldn’t rush to abandon affordable rentals on rumors. Demand for low-cost housing isn’t going away. If a federal time limit ever passes, expect more churn risk, not zero demand—so price that risk into offers and reserves, and keep an eye on what actually gets enacted vs. discussed. 

@Erik Estrada good question. From what I’ve seen, it usually comes down to perception and past experience:

• Control: Some investors think going direct gives them faster answers and fewer “middlemen” in the process.

• Cost: A few focus purely on fees and assume cutting out a broker = cheaper deal.

• Trust: If someone had a bad experience with a broker (overpromising, last-minute changes, etc.), they may swear off brokers altogether.

That said, a good broker can be invaluable. The right one already knows which lenders are a fit, which shops play games, and which ones service loans well after closing. That saves time, avoids headaches, and often nets better overall terms.

I think the real answer is: inexperienced or transactional brokers create that “bad taste,” but experienced brokers are worth their weight in gold.

@Camlie R Bella thanks for flagging this. Unfortunately, advance-fee loan scams are everywhere, and they’re getting more sophisticated with fake documents and “attorney” names. The golden rules don’t change:

• No upfront Zelle/Venmo/wire for a loan. Legit lenders fund first and deduct fees at closing.

• Transparency + traceability. If you can’t verify licensing, a physical office, and a real phone number, walk away.

• Trust your gut. If the terms feel too easy or too fast, it’s usually because there’s no real underwriting happening.

For newer investors reading: stick with verifiable lenders you can research, and always cross-check state licensing databases. A little due diligence upfront saves a lot of pain later.

@Ricardo Diaz what you're running into is really common. Once you transfer into an LLC, lenders stop treating it as a "simple refi" and it becomes a commercial/DSCR-style loan. That's why you're hearing different rules from different people.

A couple of tips to cut through the noise:

• Clarity first: Ask every lender for a written term sheet (or loan estimate) before you pay for an appraisal. If they won’t provide that, walk away.

• Know the product: If this is a rental (not your primary), DSCR is often the cleanest path into LLC ownership. But owner-occupied homes can't be done with DSCR.

• Transparency test: A reputable lender will lay out fees, points, prepayment, and title/LLC vesting requirements up front. If terms keep shifting, that's usually a sign of inexperience or a bait-and-switch.

You’re not asking for anything exotic—it’s just about matching with the right lender who actually does these regularly.

@Lior Shulstein good question — this comes up a lot because the terms sound similar but the mechanics are very different. Everyone above is right:

• Delayed financing = purchase loan, only works if you closed all cash (no liens). Basis is the lower of purchase price or appraisal.

• Cash-out refi = works if you used financing (private/hard money, etc.), but usually requires 3–6 months on title unless you can show legitimate rehab/improvements that justify a new appraised value.

A practical tip: if you want to unlock more leverage without waiting 6 months, even light rehab (new appliances, paint, flooring, etc.) can sometimes qualify the lender to treat it as a cash-out refi with no seasoning. Otherwise, you’re capped at purchase price until the clock runs.

The key is structuring the exit before you close, so you don’t get boxed in.

@Mordechai Reiss with your profile (770 credit, duplex purchase in the $300K range, 25% down), the quotes you're getting in the high-6's to around 7% line up with what I'm seeing in today's market. Rates swing depending on the leverage, DSCR strength, and whether you accept a prepay, but for a straightforward Ohio duplex deal, mid-6's to low-7's is pretty typical right now.

If someone dangled 5.99% to you, that’s a sharp rate—just make sure you read the fine print on fees and points. Sometimes the headline looks great but the total cost of capital isn’t.

Bottom line: you’re not being quoted out of line. Shop it with a couple of lenders, weigh the points vs rate trade-off, and you’ll have a good benchmark.

You’re not missing anything — Newark is just a really tough market for cash flow right now. Between high purchase prices, taxes, and expenses, most properties won’t look great on paper, even with solid rents. A lot of people buying there are banking on appreciation or long-term rent growth, but if you’re after cash flow, you may need to look in other markets.

Your plan makes sense—paying them off early will save a lot in interest and set you up for strong retirement cash flow. Just don’t ignore cash flow completely, since it gives you a cushion for vacancies or surprises. Overall, you’re on the right track, just keep reserves so you’re not stretched too thin.

It sounds like you want to set up an interest-only loan for your LLC for the $150K you previously loaned them. Here's how you can do that:

1. Loan Terms:

   • You can set up a loan with an interest rate similar to what a bank would offer for a similar loan (probably around 4-8%).

   • The LLC would only pay interest for the first 5 years and then pay off the full $150K once they refinance the property.

2. Payment Schedule:

   • Set up monthly or quarterly payments for the interest. The $150K principal would be due at the end of the 5 years (or earlier if the LLC refinances before then).

3. Tax Considerations:

   • You'll pay taxes on the interest income, and the LLC can deduct the interest as a business expense. It's important to check the interest rate to make sure it's reasonable to avoid any tax issues.

4. Documentation:

   • Have a written loan agreement that spells out the terms—interest rate, payment schedule, and when the loan will be paid off. This is important for legal and tax purposes.

Duncan — you’re running into one of the most common hurdles: commission income. Lenders want a track record (usually 12–24 months) before they’ll count it toward qualifying, which is why you’re hitting that wall with banks.

A couple of ways people in your position move forward:

• If it’s an investment property: DSCR loans are a strong option. They don't look at your personal income, only whether the property's rent covers the payment. Typical minimum is 20% down, sometimes 25% if it's your first.

• If it’s a second home you’ll live in: you’re more limited. Traditional lenders will make you wait until that commission income “seasons.” Unless you have a co-signer or can line up seller financing, patience may be the path.

• Creative angles: Sometimes sellers are willing to carry a small second, or you can cross-collateralize another asset, but banks generally won’t allow a true zero-down second home loan without experience or reserves.

You've done the right thing by saving $25k and getting your first duplex under your belt — that experience will help when lenders underwrite you. In the meantime, running the numbers with DSCR options (if this next one is strictly an investment) could keep you moving without waiting out the full year.