All Forum Posts by: Miranda Holland

@Andrew Syrios, I know, those numbers on the new loan would be a tough pill to swallow. Thanks for the encouragement to keep looking for banks.....any suggestions where to look? I've discussed with about 5 community banks in the area.

@Miranda Holland I would DEFINITELY love to get closer to 70%-80% LTV! That would give me more of my cash back out. Unfortunately, the 65% comes from the new lender.....they just won't allow higher than that for my situation.

thanks to both of you!

Hi BP Friends-

Turning to the community for help evaluating a refinance that I'm considering. Would love any thoughts or expertise you can share to help me in my deliberations.

Quick overview of the situation: 

Exactly one year ago, I purchased two condos which are rented as STRs on Airbnb (and enjoyed by me and my family occasionally). The numbers (for both units combined, held on the same mortgage): Purchase Price: $299k, Down payment: 25% (Cash-to-close totaled ~$84k), Interest rate (6.25% fixed for 5 years, then variable at prime + 1.5%, 25-yr amort., 10 year maturity)

First year performance was stellar. They averaged $2300/month in pure cash flow after all expenses for a COC return of ~35%.

As I was keeping an eye on the market over the past year, I noticed a ton of strong comps selling for about 50% more than we paid. Considering this appreciation, I began exploring refinance options with the hopes of cashing out to get all (or at least most) of my money back out>>>>(Essentially a BRRRR without the "rehab"). With the market cooling, this seemed to be a "strike while the iron's hot" scenario.

I had a lot of banks tell me I had to wait until next year, when I had a full year's worth of Airbnb revenue on my tax returns in order to qualify. However I did find a lender willing to do this now with a non-QM DSCR product (which I'm told are common for STRs). I've started down the process with the lender and the appraisal came back at $460k for the pair of units (so just about at 50% more than I paid!). The terms are not as great, but I'm wondering if it's still worth it to get (some of) my cash out. Here's the details on the new loan: 65% LTV, 9.375% interest (30-year fixed), high points & closing costs totaling $24k (mainly due to them having the do separate loans for each unit, effectively doubling the costs). The new loan also has a prepayment penalty (which I guess is common with DSCR loans), so not ideal if i want to refinance again or sell within 5 years. Due to the lower LTV and high closing costs, I'm only going to get about $53k of my original $84k invested back out of the deal.

Using last years income numbers as averages, This basically will drop my cash flow to $1350/month (mortgage will be ~$1k higher), but now only having ~$31k left in the deal, COC return will be 53%. 

I'm definitely stuck on this one and see pros & cons of doing the refinance, vs. not doing it:

Pros: I get $53k back out to go invest somewhere else (leaving less money in the deal). I have a higher COC return.

Cons: Hard for me to stomach $24k in closing costs....that feels like money thrown away. Lower monthly cash flow after refinance. Higher interest rate on the new loan. 

All right that's it. If you read this far, THANK YOU! 

let me know what you think! I would love to hear: what am I missing? How should I be thinking about this? What would you do?

I’m working on one property right now that I have used all my own funds on that I planned on BRRRRing. It’s almost done now and I’m leaning toward just getting a Loc on the property instead of a cash out finance loan with the way rates are going and if they drop back into the fours refi-ng. What are your thoughts? Thanks in advance.

Joseph

 I'm in Ethiopia. I come home every summer to the US for 6 weeks. I'm from Seattle originally. But investing in OKC. 

Hello everyone!

I'm interested in buying a property. The thing is, I don't have the money for the closing costs. I think its a lot to be able to come up with that type of money when you don't have access to it, and you know the property that you want to buy is a great deal. Unfortunately I don't have money just laying around in an account somewhere to be ready for closing. 

Does anyone know of any private money or hard money lenders that roll the closing costs into the loan?

And to all the creative and genius investor minds out there, what's the best way to handle a situation like this when someone wants to buy a property but just doesn't have the conventional means (Good Credit and Money in an account) to go through with the purchase?

Hey! I’m a new investor currently working on building out my team. My realtor recommended a lender and after speaking with them, I’ve been pre approved with an interest rate of 6%. That seems a little high and I want to shop around to find a better rate. My fear is that shopping around will result in multiple credit runs and I don’t want my score to drop. Any advice on how to intelligently shop around?

Searching for a private or hard money DSCR lender for my property in Spring TX. Needs rehabbing to rent, or sell. Anyone know of any lenders for this Property? It has quite a bit of equity.

Thanks Leona

I've looked and looked and fought off scam after scam trying to find the ever elusive, "100% funding" company to partner with as a beginner. I already have a property under contract but do not have funds for a 10%-15% down payment on a loan that will still then leave me 10%-15% short on total cost plus whatever closing costs may be. So I ask you, BiggerPockets pros, does 100% funding actually exist and if so who can get me started with an application today? 

I should add that I am in Ohio