All Forum Posts by: Blake A. Rivers

@Jonathan Warden You need a private money lender who will loan to you on DSCR. They do not verify income but do makes sure the properties cash flow can cover the monthly payments on the property. Most private lenders have rates in the 4's and can help you on these refinances.

We need above a 680 to qualify for our rental programs and anything over 700 qualifies for 75%LTV on a cash out.

@Michael Macaluso There are a few private money lenders who do DSCR loans(rental income /PITIA). To utilize most private money lenders you need to have at least 2 properties owned. We at LendingOne require a borrower to own their primary and a rental property or 2 rental properties if you rent your primary. Also, if you are currently living in the property then most private money lenders will not be able to lend to you as the property is considered owner occupied and that is a no go for almost all private lenders.

@Tyler Carraway

What requirements do private lenders or even hard money lenders have when applying for a loan?

Depends on what type of loan you are looking for:
Bridge loans ( fix & flip loan) 650 C.S or higher and at least 1 fix/flip completed or ownership of 2 rentals and your primary 

Rental loans= 680 or higher C.S. and own 1 rental and your primary or 2 rentals and rent your primary.

What credit score is necessary do I need to achieve when applying for a loan?

Bridge loans ( fix & flip loan) 650 C.S or higher
Rental loans= 680 or higher C.S.

What papers or documents will I have to provide?

Articles of incorporation, EIN letter, lease or sales contract, bank statements and construction budget (if applicable) 

What are the normal interest rates charged for those loans?
Bridge loans ( fix & flip loan) 7.49%-9.99% interest only
Rental loans 4.25%-5.75% ( 3.5% for select investors) 

Hopefully this information helps when you are looking into private money lenders. I work for a national private money lender and these are our generally requirements and terms. 

I only know of portfolio lenders doing a rate & term refinance prior to 90days of seasoning. If you are looking to cash-out the properties you should wait the 90 days so that the appraisal from your purchase is not considered when doing your After repair valuation. Most private lenders can do 75% LTV on a 30 year loan with a cash-out but as said previously it is after 90days.

Most lenders that lend to LLCs or more specifically Real Estate investment LLCs are looking for real estate ownership experience prior to getting a loan for you in your LLC. The reason for this is that most Real Estate investment loan providers are asset based lenders and are looking at your liquidity, experience as a real estate investor and the asset you are buying/refinancing. @Michael Almeida If you own properties in your name or have done successful fix & flips in last two years you should be able to get financing from most national private money lenders made to your LLC.

1. Are lenders comfortable underwriting this many mortgages at the same time?
 - Private money lenders would be willing to underwrite a portfolio purchase. If you have previous real estate ownership experience you will qualify but if you have 0 real estate holdings or 0 fix & flips you will not meet the requirements. Private money lenders are beneficial for investors looking to grow quickly and without a cap on properties.

2. Will my DTI be a disqualifier/problem as the number of doors (and debt) increase?
DTI is something that will be an issue as you scale your business. The DTI issue is avoidable if you are proactive and create a REI LLC. Once you have the LLC you can utilize private lenders who will put the debt on your LLC and not your personal name. This allows you to maximize the lending you can receive from a conventional lender and maximize the growth potential of your portfolio.

3. Assuming I'm capped from a mortgage standpoint, what do you think of putting down 30/40% down on fewer properties (4/5)? 

There is very little benefit of putting more capital down on less properties. If you do not have ownership experience you should buy 1-2 properties from a conventional lender(CU & Local Banks) and then get in touch with a private money lender with the goal of acquiring 5+ properties ASAP. The issue with private money is that you are looking at around 20% down regardless of exit strategy but they have products that can help with value add purchases unlike a conventional lender.

@E Ibrahim hope this helps answer some of your questions DM me if you have any more.

Corvest, Arbor and LendingOne have portfolio products but they all have a minimum of around 60k per property as a loan amount. With the avg. property value of your portfolio being only 55k I do not think they would be able to do the whole portfolio. You can look through your portfolio and see if you have enough properties over the 87k property value mark to qualify for a smaller portfolio. We have a minimum loan amount of 500k on our portfolio products and that means your properties must exceed 667k and be able to achieve 75% LTV on the portfolio. It is very tough to find a portfolio lender who will take on properties valued less than 100k because if you were to default it would be very difficult for them to recoup the funds in a sale.

@Kyle J. I work for a national private money lender who does have 30 year terms on rental loans and interest rates between 4.5%-5.5%,Also we have closed fix/flip loans in as quick as 7 days. Everything else @Kyle J. has said is accurate. We do charge for the appraisal upfront but that is the only cost prior to the closing table on all of our loans. If anyone is offering you 100% financing, no credit check or no experience they are most likely not a real private/hard money lender. Sad that lenders who imitate real private money lenders are creating such a sense of distrust with the investment community. Always check the website and dig a little deeper into the companies you choose to get your private funding from.

You can get extremely competitive rates from private money lenders who lend to your LLC. The best part of a private money lender is that you are not capped at 10 properties like a conventional lender. You can continue to grow your portfolio by finding a funding partner that suits your strategy and growth. Most offer rates in the mid 4's on rental loans and about 8% on fix and flip loans. There are many funding options out there that can help you get a loan in your LLC and as long as you have properties under your control or have done fix & flips in the past 2 years you should be qualified easily. Most National Private Money lenders have products ranging from 30 yr fixed rate single asset loans to 100+ property interest only non-recourse loans.