All Forum Posts by: Kevin Woodard

First thing you should probably do is consult an attorney to keep everything square. The second thing is figure out your constraints with your partner. @Stephanie P. brought up a valid point with giving them a portion of membership that meets your lender's requirements. If it's a loan it will likely require some type of seasoning, or an explanation at the very least.

I'd be happy to answer any question I've worked with clients in various agreements. 

There are definitely options out there. There are entire products (DSCR just one example) that are asset based. If you have any questions about them or transitioning out of the military I'd be more than happy to talk. I separated from the Marine Corps, just last year!

Hey Justin, if you have any questions feel free to reach out! 

Like @Eliott Elias said, a DSCR loan is most likely your best bet. You'll be able to close in a LLC and it resembles a conventional loan in terms of structure (30 year FRM).

@Xiao Xiong while a large down payment will boost cash flow because you're paying less monthly to interest and you have a large equity position, your ROI will likely be effected 📉.

@Jonathan Chu I would consult an attorney about structuring the entity or the profit sharing. However, from my experience how the entity is underwritten will vary by lender.

Also from experience, you can make a member a partial owner (e.g. 20%) while sharing profit at 50%.

It sounds like you have some great options! I’d be more than happy to take a look for you, as well!

I probably sound like a broken record. But as a lender I always suggest clients have a handful of lenders in their arsenal to best fit the deal they are working on. There are a lot of variables that come into play that one may be better than another.

For a light rehab you may want 100% financing for a 6 month term, but that may be a risky move if you’re doing a heavy rehab on a unique property. For the latter example you may be better off with more money in the deal and a longer term loan. 

So understand how each lender underwrites the deal and how they’re structure their terms, to have the best person for your particular situation. 

Connect with a handful of lenders and learn how they structure their loans. As far as the purchase, you'll want to find a deal and generally get it under contract before you get the lender involved. 

@Elaina Burkhart with the right loan you should be able to refinance. The conditions would be credit and can you/the property qualify for that loan amount (DTI/DSCR/other). The next bit would be making sense of the numbers.

From the BRRRR strategy standpoint, as long as you're refinancing on the ARV (construction is complete) then you're good. The added complexity to this would be, you could refinance now with a construction loan to knock out the rehab then refinance into a long term product to payoff the loan and pay yourself back. You may be able to refinance using the as-is value, or you may have to do a delayed purchase using the purchase price for the new lien (e.g. 75% back of the $140,000 instead of 75% back of the $200,000 AIV).