All Forum Posts by: Kyle Deutschmann

I would get a bridge loan to acquire the property if it needs to be rehabbed and/or closed quickly. For experienced borrowers I can lend up to 80% LTC and 100% of rehab on 5+ unit apartment deals like this. Then once it's acquired and/or fixed up you could shop around for long term financing if planning on holding the property rather than flipping it. 

As others have mentioned, yes you can use section 8 rents with some DSCR lenders. Most lenders I've worked with will use the lesser of the current rents or market rents reported by the appraiser when calculating your debt service coverage ratio.

 You're definitely on the right track! I always recommend speaking with a lender or two before you start deal hunting. That way you have them in your back pocket when you find the right one, and generally lenders can move a little faster to close the deal once you're already pre-approved and in their system. 

The title search would likely happen simultaneously to your own due diligence and the lender's due diligence so it wouldn't really be separate steps. As others have mentioned, having a good ballpark estimate of rehab costs before closing is also smart, and likely required if using a hard money lender. 

It's going to be tough to get much better than that right now. 

Conventional owner-occupied mortgage rates are above 7% today (source: Mortgage News Daily - Mortgage And Real Estate News). So if conventional primary residence rates are that high, par rates on investment properties are generally higher. 

I'm in the same boat for reference- I bought into the "buy now, refi later" idea and am sitting on a 7.375% on my latest property acquisition and a commercial line of credit I have is at prime + 1 (so 8.5%). I would recommend looking at a loan with a short prepayment penalty if looking to get cash out, that way you can refinance again if rates drop again in the near future. 

As others have mentioned, DSCR loans are generally for turnkey rentals (although outdated rentals may still qualify depending on the level of deferred maintenance). However, an easier option would be to use a bridge loan to help with acquisition and rehab financing if the property needs some work. Happy to chat about financing options if you have a BRRR deal you're eyeing.

You're spot on from your assessment so far. Conventional financing is a great option to get started if you have a W2 job or easily verifiable income and you're financing a 1-4 unit property. You can generally get the best terms (max leverage and best rates) on an owner-occupied house. However, they will certainly require you to jump through more hoops compared to private and hard money lenders. 

Some private lenders like the one I work with doesn't require appraisals on fix and flip/new construction loans and also doesn't require tax returns/W2s. There is still some paperwork involved but significantly less than traditional lending institutions.  

 Some lenders will allow you to go off the appraised value with less than 6 month seasoning, if you did work to the property like you did. Happy to help if still shopping around lenders. 

You can certainly use hard money lenders for new builds. The benefit is significantly less red tape compared to working with your traditional local banks who also do new construction financing. Most hard money lenders will want to know about your track record - if you have no experience, partnering with someone who has a track record will likely be an easier path to approval (and likely higher leverage) than applying by yourself. 

 Who is quoting you an 8% rate? Depending on your exact situation, you could likely get something closer to 7% and make these numbers work a little better.  

Hey Cesar, the lender I work with lends there, up to 75% loan-to-ARV in most scenarios on 1-4 unit properties. Happy to chat with you if you're still looking for lenders to add to your Rolodex