All Forum Posts by: Jason Park

Quote from @Glenn Smith:

I am purchasing my first investment property out in Cleveland and need some help figuring out the financing portion. I have the necessary income and credit, but am a little lost on what types of loan products and which lenders I should be looking for. 

Can anyone help me understand what types of loan options are available to me and which banks are investor friendly?

 Hey Glenn, 

To keep it simple (and in general terms), bigger banks usually do not fund distressed properties that need rehab. There are small local banks that will offer loan products for such properties, you would have to call around and see (small banks with about 5-10 branches often work best in my experience). 

Next is a hard money lender/private money lenders. Most are nation wide and will lend to wide variety of products such as a fix and flip loan, bridge, and long term DSCR loans. These are advantageous as they look mostly at the asset's for the loan not necessarily your personal statements as much as conventional loans.

I hope this helps! Sorry if it was more then you were looking for or if you already knew!

Quote from @Mike Musarra:

I'm purchasing a home in a suburb of Cleveland with Hard Money.  My original intention was to flip the property and use the proceeds to help purchase a small multi-family home but am now considering holding the Single Family property as a rental.  

The Hardmoney lender will need ballooned out at 91k in 12 months.  I will not be able to do a cashout refi with a conventional lender for 12 months, and although Fannie and Freddie require a 12 month seasoning period for cashout refi's, it seems most convetional lenders, even in a straight out refinance (with no cash out) require 12 months as a policy.

Does anyone have any recommendations for long term lenders that will balloon me out on a long term loan?

ARV for the property will be about 150k - possibly 170k if converted to a 3 bedroom which is an option I'm exploring.

As they say, Thanks in advance.

 Hey Mike,

As mentioned above DSCR is probably your best option here! 70-80% cashout refinance. You're done with the rehab? Is it currently rented?

I would get a tenant in the unit and apply for a DSCR loan to cash out!

Hope this helps!

Quote from @Ayelet Graff:

Hi there,

I’m Looking for your advice on flipping in Pittsburgh, which neighbourhoods will you recommend to start research for?

Thanks :)

Hey Ayelet, do you live in Pittsburgh?
It's got a wide variety of neighborhoods, so I would want to ask which types of flips you're looking to do? Are you trying to target first time home buyers? More of higher end flips?

Quote from @Richard Edgar:

I’m a new investor. My family has a family farm consisting of 3 parcels of land. 2 parcels are owned free and clear. Each parcel is worth roughly $350K. That said, we’re currently cash poor. Any advice on the best way to leverage all  this equity if I find any good opportunity(s)?

 Hey Richard! 

Seems like a lot of investors (including me) can be in these situations from time to time!

Good news is you can always leverage your land/home. From what I am reading you have 1 parcel that has a home and 2 parcels that is just land correct?

You can most likely just sell the land and do a cash out refi on the property. 

Hope this helps!

Quote from @David Vaughn:

Hello my name is David. I say seasoned so maybe not by today's standards. I have over 50 doors but have basically done it the old way by saving up down payments etc. and buying extremely distressed and sweat equity Ing them back to life. I have been looking at the Brrrr method. It does seem like a good way to acquire more properties but how do they pay out as far as cashflow when you get say, 20 or so. What are some things to look for along the way? Pitfalls? I am also a general contractor in my area so setting up a scope of work and following it won't be hard plus I can pay myself for oversight and any work done in the process. Any and all help are welcome as I have just begun my research into the strategy. 

 Hey David!

I think you got a lot of good things going on as you are your own contractor and most likely be able to cut cost in your rehab..

I believe your questions is pertaining to how it cashflows and what are some things to look for as you continue to BRRRR.. Not sure your area that you're investing in, but the perfect BRRRR are kind of hard to come by now in the recent years.. so have the expectations to leave some type of money in the deal..

Big thing that I've ran into and I've seen other investors run into is running out of money doing the BRRRR.. as some or most times you have to leave a bit of money in the deal, folks usually run out of cash to continue to do deals.. especially in the recent years..But good news is.. as you're holding and cashflowing on the deals, there is always opportunity to recapture the equity, not to mention tax benefits etc..

I also see some pitfalls in investors getting desparate for deals, so they get lenient on their number etc.. as they do i see some get backwards on some deals... (or tell themselves $50 cashflow is fine but their standard was $400 kind of thing..)

Hope this helps! LMK if i can help in any way!

Quote from @Carlos Quiros:

New investor here

I have 2 rental properties (duplex & triplex) that I bought at the highest interest rates (8%), they DO cash flow but now that rates have softened a bit my question is when do you all as investors decide to pull the trigger on refinances? A full point? 2 points?

Just looking for constructive feedback....

Carlos

 Hey Carlos,

I guess it depends on your goals, how much it's appreciated, etc.. Just looking simply at rates may trap you in a way.. As my advice would be to look at what you want to achieve, is it higher cashflow? Cash out to invest in other properties? 

Has your properties appreciated a bunch where sitting on tons of equity just doesn't make sense? Remember, that it costs money to refi...if its a small amount of juice to squeeze, I would just run your numbers to take a look at what makes sense for you and your journey. 

Hope this helps!

Quote from @Rahma Z.:

Hello all! I am under contract on a property that I plan to rehab and hold as a long term rental. I'm looking for a lender with the best option with the lowest amount of down + 100% rehab. The lender I have used in the past has been fine but has recently changed their terms and i'm not looking to do 80% LTV. Any recommendations for lenders? Thanks in advance!

 Hey Rahma 

The percentage of loans depends on your experience level for most HML, but I believe we have the loan you're looking for!

Quote from @Sadie Craig:

I am looking for a private money lender around the Missouri area to build an ongoing relationship with for current and future investments.

Thanks in advance.

Hi Sadie!
I believe we can help you! 

Quote from @Trent M.:

I have found a family member that's willing to give me a loan for a rental property. This is the first time for both of us.

How do I make this a legit deal? Do we need to contact a lawyer? Do people use generic documents?

I'm not sure where to go from here. Any help or information would be much appreciated!

 Hi Trent,

I suggest you and the family member meet with a lawyer and make it official. I would make sure that it is a lawyer who has done this in the past that can walk you through some scenarios. Generic agreements/hand shake agreements with vague exist strategy can get a little nasty in my experience. Take the time to sit and chat go through difficult scenarios to ensure that everything is hashed out. Last thing you want (in my opinion) is to have some sort of hard feelings due to mis communication.

Hope this helps! 

Quote from @Kesete Thompkins:

I have a real estate portfolio with good amount of equity (most of the portfolio is free and clear), however my personal DTI ratio is too high and that's stopping me from tapping into it to settle some debts and buy more properties. Other than lowering my DTI ratio (which is what I'm focusing on now), is there another way to realize that equity or am I stuck with dead equity until I can get that ratio to a better space?

I'm open to any and all thoughts and ideas. Thanks in advance.

Kay

 Hey Kay,

If the portfolio is mostly free and clear and you're trying to pull some cash out for equity, it seems like a cash out refi would be a great choice. 30 year DSCR loans are available to lend to LLC's and depending on the situation can cash out up to 70-80% ARV. Also, DSCR looks at the individual property and the debt service coverage ratio.. This doesn't mean you have to pull out the full percentage, but whatever works best for your scenario.

Hope this helps! LMK if you need anything else!