All Forum Posts by: Mark Munson

Hi @Michelle Le Mere

I'm a bit confused, you have debt on the property and you are seeking a HELOC to access the equity, but then you said you'd payoff the mortgage? The HELOC won't cover the entirety of the 1st lien debt, so how are you paying off the mortgage? Even if you do, you'll still have the HELOC to pay off.

There are national HM lenders that do 100% financing, but they only do them to experienced investors (5+ exits in 24 months and 720+ credit). DM me and I'll tell you a few, as I won't post here to avoid solicitation rules on these forums. They also do them for members of certain groups or franchises. These aren't small companies by any means, one is one of the largest HMLs out there. You also stated, "seller financing is hard to find", so I'm assuming you now agree that it isn't impossible, it's just that you find it difficult to source them. Well of course it is, REI isn't a get rich quick and easy scheme. You either have one of two problems in REI, you either have a lead problem (which you do if you don't know how to source creative or off-market deals and you are reliant upon agents) or you have a conversion problem, which most people do if they don't have a systematized process for negotiating and making cash/creative offers. I strongly encourage you to join your local REIA and sit through every speaker over the course of a year, you will have your mind opened to numerous avenues that are real and replicable.

Hi @Chris Kendrick

     I own a brokerage and am a lender, so you are hearing it from a bank. We have originated millions in loans over a decade, all investment loans. You are asking the worst resources those questions, then relying upon their "expertise". 

Can you explain to me why you'd consult a real estate agent or traditional bank about seller-financing? Agents aren't investors. Nor are they lenders and nor are the lenders you are speaking to non-owner occupied investment lenders. And the entry barrier to become an agent is laughable in some states, it doesn't teach them how to be an investor. It certainly doesn't teach them creative financing. You stating no such thing as 0 percent down is comical. Somehow you have the ability to negate numerous transactions and examples from investors across the country? What experience grants you that ability to declare that? Have you done a seller carry-back? Do you know what a silent second is? Have you done sub-to? Have you assumed a mortgage? How many novation agreements have you done? Have you sold a creative deal by doing a wrap? Have all the resources you've declared authorities done those things? Can they define those things without referencing Google? Can you define those things without having to Google after reading my post? I know the answer to these questions and I know you aren't remotely well-versed on these as the BP community is in its entirety. I'm not trying to be combative, I want you to expand your mindset and be open, otherwise you have failed REI before you even got started. I wish you the best of luck.

Hi @Chris Kendrick

I can show you millions in examples of seller-financing, across numerous asset classes and states. It is a massive industry and I can point to a Storage Facility in FL (one of many that were seller-financed) that was done with seller financing. I also a member of one of the largest Mastermind groups that focuses on off-market acquisitions, and countless members have done seller-financing on SFRs. You have a very limited mindset and are drawing universal conclusions from anecdotal evidence. Realtors are rarely well-versed in creative financing, let alone REI. I encourage you to get around different people, as you are limiting your mindset and listening to the ignorant. I wish you the best of luck, just know from my experience and many others, that 0% down and no interest are real things and I can show you real examples. Level up your associations and experiential knowledge, then you'll realize every avenue that is truly possible in REI.

Hi @Heather Watson

DSCR lenders will go to a max 80% of the purchase price on most residential properties. The only difficulties here are the following: 1. It may be deemed too rural for most lenders due to the location. 2. DSCR lenders want to be in first position and won't just lend the down payment amount. 3. There are STR guidelines that have to be met and usually the lenders will need data to support that income if that income needs to be used to calculate the DSCR. 

Feel free to reach out if you need any advice. Best of luck!

Just an FYI, DSCR lenders go to $75k on minimum loan amounts. They generally don't go under $250k if it is commercial, but most everyone will do $75k loan amounts on residential. 

Hi @Michele Granata

It seems you are on the right track from your post, in more ways than one. Stay laser focused on one or two things at most. Go deep, not wide. It is easy to get whiplash from all the shiny things in REI. Secondly, the other thing you smartly pointed out, is TAKE MASSIVE ACTION. Don't overanalyze to the point of inaction. Theoretical knowledge is important, but experiential knowledge is priceless. Taking any action is what separates the dreamers from the doers. As a another piece of advice, start with the end in mind. Map out your goals and start from the end when building your system to get there. I'd be happy to share any advice I have, feel free to reach out if you need anything. Best of luck!

Hi @Jason C.

Look into DSCR loans, floor rates are near 7% on those at the moment. They don't require tax returns, paystubs, etc. your DTI is a non-factor. They don't report to credit bureaus either. It will be about 3-4 weeks to close on average. The max loan amount will be based upon the Debt Service Coverage Ratio. Essentially, the rental income must be equal to or greater than the PITI. Some DSCR lenders still may have "One Borrower Exposure" caps, but you'd need at least another $5M in loans with them to hit that, then you can just move on to the next DSCR lender and repeat that process. Feel free to reach out if you need advice.

Hi @Adriana Diaz

      I would start networking at your local RE meetups. I'm sure there are many in Chicago, so look up Chicago REIAs. If you have construction expreience, then you can likely find people that would be interested in JVing or using you as a PM, as many investors lack understanding and knowledge on the reno side of things. Be a sponge and put yourself in rooms of investors as often as possible, that is by far the best way to learn and create a network of like-minded people. Feel free to reach out if you need any advice, best of luck!

Hi @Carolina Mejia

       How are you comping the value of the property? I ask because if all the structures are on one parcel, you need to be comping it as a triplex, as that is what an appraiser will do. If your interest rate is locked in, then 7% is fine. If not, and this is dependent upon the type of loan you are using, I would use a higher interest rate to be on the safe side.