All Forum Posts by: Matty Foley

@Matty Foley Last thing: Of course the Borrower(s) would need to be credit worthy and the loan would be subject to underwriting. The subject properties cash flow is the main requirement in starting the process, but we would make sure the Borrower has the financial standing and global cash flow to pay the debt if secondary source of repayment was needed.

@Michael Noto thanks Michael! I know it’s was lengthy post, but I did mention that we do not require any seasoning period. We feel if the owner has gotten the property leased, they have added value to the property. As soon as I receive a copy of the signed lease I will order the appraisal and get started on the refinance process. Like I said, it’s common that 75% of the appraised value, after renovations, will reimburse the borrower close or all of the amount they’ve invested in the property (assuming they’ve bought and renovated the property in cash). *I know that many banks do not offer this product and will only advance 75% of the purchase price. It’s about finding the right community Bank. Let me know if that all makes sense.

I will speak on my bank's timeline assuming you are using traditional financing. In my case, if I have all of the information I need (tax returns, PFS, property information, etc...) I turn these around in about 30 days - and have done quicker if my borrower is in a rush. I would need a copy of the executed lease showing that the DSCR covers at 1.2x or better. To determine if your properties would cover the DSCR, most commercial banks will calculate the properties' net income at 70% of the gross rental income (vacancy and expenses). If it's a newer property and significant renovations have been done, we will sometimes use 75% of gross rents. We do not require the property to be seasoned for a certain amount of time if that's your question. As long as the property is leased, we will reimburse/refinance 75% of the appraised value. If you do this right you should be recouping the majority of the cash you have invested. The 30-35 day period would be common for any commercial deal. That accounts for underwriting, waiting on the appraisal, getting the loan approved, collecting due diligence items, and have loan documents prepared for closing. In your case, if the properties are already renovated and leased and the bank is still making you wait to refinance, I would recommend searching for a different bank. but id suggests calling some local community banks and asking to speak to a commercial lender and ask those specific questions. I hope that helps.