All Forum Posts by: Kevin Woodard

What are you looking to accomplish? What are your expectations in terms of leverage/terms/etc?

I only lend to entities and would be happy to answer any questions you have. 

I’ll reach out to a friend of mine and send over a point of contact.

@Mason Dylan Hernandez get some! Reaching out to connect. 

DSCR loans are definitely an option. However try to really understand how those programs work, there is some nuance that could break a good deal.

Interest only makes sense in a scenario when you need more loan now and your rent rate isn't meeting the DSCR requirement.

If the goal is to own the properties free and clear, obviously I/O won't align. However if your appraisal came in a bit low and you went over your budget, maybe you go for the 80% LTV 5/1 ARM. You just have to play the numbers.

From what it sounds like it could be a good deal based on numbers. Why is the seller selling? I’m assuming they didn’t do the work on it then, just based on pricing.

What’s the tenant situation?

There is a rehab component to your project. Just curious, is the rehab time because there are tenants already in there? If you go with a construction loan your interest will be 10%+ interest-only for the duration of the construction but then you can tap into that forced appreciated without either 1) financing the $60,000 out of pocket (e.g. driving down credit score making refinancing more difficult) 2) having a pre-payment penalty (fairly typical for long term investor products). 

What does this mean? Acquisition interest rate should be adjusted to somewhere in the 10%-12% range and loan amount $156,000 (for 24 months). You should expect to bring 20% to close (although if it's a discounted property you may get away with less) + closing costs + 2%-4% of the loan amount for closing costs. Down payment would be more like $24,000 + closing + fees ( total cash to close for conservative calculations more like $33,000) compared to $70,000. Monthly interest-only payment $1,558 + insurance + taxes. 

For the refinance, you should adjust loan amount to $180,000 (75% of 240,000, you may be able to get 80% depending on state). You should bump that interest up to 8.5% for conservative underwriting in a long term increasing rate environment. This will give you an P&I of $1,352, factor in taxes and insurance. 

 Just looking at numbers posted, would be glad to discuss what those numbers mean for making or breaking the deal. Hope this helps. 

Our next meeting is the Christmas holiday meeting. Our next meeting will be held at Limoncello in Goshen. The speakers will be our member Kristina Mullings and myself. The topic will be Managing the millionaire mindset. Key Bank will be in attendance and Keybank will be giving out prizes. I hope everyone will be in attendance.

Interested in Real Estate Investing? We would love to get to know you! Join our growing monthly meetup group, where you will find folks just like you who want to learn how to expand their businesses in a free, relaxed, no hassle, no sales pitch environment. Our monthly meetings offer many networking opportunities along with a great insight into the myriad of aspects of Real Estate Investment. Bring your business cards!

Construction loans offer 85% LTV and 100% financing of the renovation. After stabilizing the property you could refinance with low money invested or cash back to you. If you are looking for turnkey 20% is fairly standard for a 1-4 unit.