All Forum Posts by: George Despotopoulos

Hey @Chris Hernandez - congrats on getting a deal locked down. Most private lenders, hard money lenders, and non-bank lenders will want to be the first and only lien on the property, so it may not be possible to borrow $50K and put a second lien/further debt on it.

Why wouldn't you just finance the whole thing with one lender? 

Also, are you looking to fund any renovations? Or are you just trying to finance the purchase? 

 Hey Kate!

Congrats on closing your first deal about a week or so ago! That's very exciting and a great accomplishment. What was your first deal? 

As far as your second. If you're looking to go the non-bank route, your score should be fine. What was it when you had your credit pulled on the first one? Also, what sort of deal are you targeting for your next purchase? Is it a rental that's move-in ready or has tenants in place, a fix & flip, or a rental that needs some rehab before you can get tenants in there? 

Depending on the deal, hard money may or may not be best suited for your investment.

Congrats Daniel. Sounds like you are well on your way to completing your renovation, finding a tenant, and earning good income from your investment property. As you find more opportunities and gain experience as an operator, borrowing opportunities to fund these future investment projects will become more available and at lower cost to you (in terms of rates). Check out the ads in the Marketplace section at the top of the site to find  more info on these lenders

Hey @Robin A Jackson, 

A loan of 100% LTV at a 10% rate, a 6-18 month term, and I'm assuming no points at closing (you didn't mention any, perhaps double check this with the lender) is a great option. As long as the appropriate docs are in place with the lender (so you're fully aware of all the terms/conditions of the loan) and you have a verified exit strategy (refinance or sell at a price that would cover the debt), I would go with that option.

I think the problem may be that you're missing an R! A very important R..."Repeat." Yes, you spend the $4,400, or whatever the closing costs are, to get $25,000 and then purchase another income producing property. Keeping growing your portfolio!

Hey @Account Closed

To answer you. I think not wanting to put more than 5% down will not be possible for the near-term. You will need to get a few rehabs/flips under your belt to qualify for 85%+LTC / 90%+ rehab costs. 

Hard money is a viable option for your first property. Just again, the lender may require you to put 15% - 25% down, and may not fund 100% of rehab (likely 75% - 85% of rehab). Also, expect them to limit the rehab costs at 50% of your purchase price. 

The drawbacks of hard money are that it's short term, usually 12 months, sometimes 6 or 18 months and it's also higher in terms of rates/fees. Expect, for a first time investor, something in the 10% - 13% range and to pay 2.5%-3.5% of the loan amount as an origination fee. This varies by the lender. Your concern with any lender should be their process/customer service, ability to lend, if there's a holdback for rehab, the draw process. Additionally, I would look for a lender that's upfront with their fees/process upfront so you know what's expected of you in terms of docs and criteria, time to close, and the cost of closing a loan with them. 

@David Mohrmann - 

Most hard money lenders usually only lend against non-owner occupied properties.

There are non-bank lenders that cater to foreign investors. Like others have mentioned, be prepared to put a little more down (30%-35% is not uncommon) and have a bit more in reserves to show (3-6 months liquid reserves). Some may even require a hold-back of a certain amount, it varies by lender. My point being that there are definitely options for foreign investors. 

@Tyrone DeVore 

What's the purpose/reasoning behind not wanting to issue your tax returns. With non-bank lenders usually the tax returns will not be used to calculate a DTI. The returns will be reviewed to confirm validation of application information, business ownership and good standing with the IRS.

Also at sub 700 FICO, you're looking at a rate from 7.0-8.50% depending on the lender and LTV.

I would ask the attorney to cite where he obtained that information. Could be helpful to all of us.