All Forum Posts by: Jonathan Taylor

@Kristin Montgomery this is very easy to do with non-conventional lending, in fact most non conventional/DSCR lenders prefer it. If you are closing with a conventional loan (DTI and income used to qualify) then most lenders will NOT lend under an LLC.

What has been spoken about here is closing in personal name and quit claiming to your LLC after closing. I do not recommend this as it increases the risk of the lender calling the note due. You have stipulations in your loan documents that you will abide by the rules of the loan. If you are closing in a personal name then change title to an LLC, lenders may view this as a violation of loan docs and could move forward with reprocusions. This is a maybe and other investors will chime in with different experiences.

I close loans under LLCs all the time with DSCR/non conventional lenders all the time.

Hope that helps.

@Lauren Ruppert 15% down isnt a reality in this market for turn key DSCR purchases. Most purchases do not debt cover at 20% down so the market is dictating purchases in the 25% range. The property has to debt cover for rates and terms to be competitive. I have lenders that can do purchases without DSCR being considered but rates are higher.

For experienced borrowers looking to add value, like a fix and flip, 15% down is realistic but loan minimums need to be met and borrower needs at least 6+ flips in the past 36 months.

Hope that helps. Id investigate thoroughly any lender offering less than 20% down at market rents and asking price. 

@Linda Burger call the lender who has the note and ask if they waive the PPP as some commercial lenders will consider it.  I would do a cost benefit and see where the use of that equity makes the most sense. If you have XX dollars and can make Y returns on it, then it is worth it to take the higher rate. 

@Michael Rendon Primary residential mortgages backed by Fannie/Freddie are slow to change. STRs are relatively new for small operators. You can try to qualify based on the rents your report on your Schedule E, if that number is low. You can try and use LTRs at a 25% Haircut to reduce your DTI but since LTRs arent on your tax returns, it may not work.

Or for a new purchase, DSCR can be more creative with purchases and I have lenders that can use market STRs to qualify for a property.

@Chris Russell if the monthly savings of a loan at 4.125% is better than using the cash out of 100k at 7.5% to then buy more income pencils out for you, then stick to what you have but understand the opportunity costs and what can be done with the 100k. Its not solely about rate, its about what you can do with the leveraged cash to buy more income. 

I agree with @Jon Schwartz. It's a different landscape here. I house hack a four unit and it wasnt until I did a massive value add was I able to see the savings mentioned above. I was lucky and now cash flow but the amount of work, time and money it took makes me an outlier. 

'Income is taxed, savings are not' is great advice.

Look in Naca.com as this company helps first time buyers to house hack for value add purchases. It's possible just not easy. 

@Emma Duncan thats unfortunate you had to go through that experience and thank you for sharing. What were your other 8 closing like? There is a treasure trove of info on reputable companies and brokers here so you have a lot of options. Happy to help and answer your questions since I work with a solid 85+ lenders. 

@Chris Russell I agree with @Nathan Grabau and @David Ramirez, you're asking the current seller to give you a 100k. I have not heard of a seller who 1) has that kind of cash or 2) willing to lend it. Asking is free but its unlikely. Try refinancing with a DSCR lender as you can get a cash out if you are on title for at least 3 months.

@Steven Barr The same amount of labor is required a loan for 500,000 vs a 73k loan loan. Orig is a little high but 2800 isn't terrible for actual cost vs percentage. I did a 97k loan for my own duplex purchase and was charged 6% total for loan costs. 

@Ali MirRasekhian youre doing a good job of running numbers but HML closing costs change by lender. They usually charge pts, and processing/doc fees. T/E wont vary much as it takes the same amount of labor for a 100k property as a 800k property. So percentage wise, your T/E and HML costs will be higher in relation to property value.

I closed a 97k duplex and lender/T and E fees were 5.5% of the purchase. High in terms of percentages to loan value but standard in terms of cost.