All Forum Posts by: Nathan Harden

What up BP?!

I am currently trying to expand my network with local investors that have experience with creative financing. Heck, even if you aren't local but have experience, I would love to connect as well!

As interest rates continue to climb, I especially want to learn from investors that have had success with creative financing deals. I do see the market shifting towards creative financing because as rates continue to climb, finding deals that cash flow with traditional loans are now few and far between. 

Personally, I see creative financing (especially seller financing) as the best way for both parties to win for at least the next year or two. Why do I say this? From my experience, rates are so high at the moment that the only way for a lot of these deals to pencil out is to low ball the seller in order for the numbers to work for the buyer. Seller financing allows for the seller to get market value for the property and the buyer to get better terms than they could at a bank. Win-Win. In terms of creative financing, It's not just seller financing, Subto has potential to be Win-Win as well.

I am a newer investor, but I do bring some experience to the table. I started investing a year ago and have since been able to acquire 4 properties. All of which have been out of state. Plenty of lessons learned on my end that are easily avoidable now that I look back at it. None of these properties were acquired with creative finance so that is why I am seeking investors with experience in that field. 

I appreciate you taking the time to read this.

Cheers!

Quote from @Henry T.:

I don't see how you can, but why would you want to invest in Seattle anyway? For example, If you rent to a family with school kids(even daycare) you can't evict them during the entire school year. 9 months no rent!  In Seattle it's open season on landlords. Forget it.

 Hit the nail on the head.

Christina,

I think Dave hit the nail on the head. I think getting pre approved will be your best course of action just so that you can see, "Oh hey, my interest rate would actually be ......" then run your numbers from there. 1% difference in terms of rate and a loan of that caliber could make the difference between cash flow and not.

Example, I just talked with a broker today for some of my rentals and he said my rates could vary anywhere from 7.6% up to around 10% if I need to go DSCR.

HELOC is a great strategy, but I'm assuming that its an ARM?? So always calculate on the side of caution because one moth it could be 9%, the next could be 10%, so run your numbers with a worse case scenario.

I see your from Enumclaw?? I love it up there! I live just down the hill in Graham/Orting.

Welcome!

First and foremost, thank you for your service!

You like cooking??? Well I like to eat! hahaha

I quit my 9-5 about 1.5 years ago, best decision I ever made. ALWAYS bet on yourself.

I live in Pierce County and my office is located in Lacey, I would be more than happy to connect with you sometime. 

Seattle is tough for cash flow. I know the old saying "If you put down enough money, anything will cash flow" I think that's a dumb way to look at it because then you are just tying up a bunch of capital into one property. Not a good way to see growth.

Short answer, you will need to look into STR or MTR.

Tacoma does have its areas, I guess every city/town does. If you get up into Ruston, parts of the west end/fircrest and Browns Point is where you will find the houses and properties that have the larger price tags on them. That being said, downtown Tacoma has quite the night life so I guess it will come down to what your buyers are looking for in a home/property.

Quote from @Alecia Loveless:

@Nathan Harden My smallish hometown bank just did a loan involving an LLC for me. They have also said they would do loans for under $100K as at one point in time they were common where I live.

I’ve been using this bank and they’ve never required points or excessive fees. My typical closing costs range between $6-7500. That also includes things like prorated water, sewer, and taxes.

It might be that you need to try a credit union or keep trying other local lenders. It can’t hurt to make some more phone calls.

 I appreciate the response. I have contacted all credit unions around whether its because I live out of state or some other reason, I have had zero luck with finding someone to lend to me.

Quote from @Caroline Gerardo:

CMBS/commercial does not touch those low dollar amounts.

Any lender is going to report on your name, even hard money does when you late pay. Anonymous is a fallacy. 

Without 2021 2022 returns demonstrating they cash flow... DSCR or Bank statement loans are your options. Rents for each are $900? You also need some reserve cash in checking and good to great FICO score.

Cost to do small loans is going to make your blood pressure rise. Minimum 2 points $1600, title/escrow $1890/+ impounds/$500 appraisal/ tax recording... we are talking $4000 minimum for each. 

 That high of fees? Wow. No way of getting around all of those fees? Even if I were to blanket them in to one loan? 

Fico is great, right around 770. Rents are Between $1000-$1100.

So you're thinking DSCR is the best/only option?

Hey BP!

I have 3 SF properties in my portfolio. I am looking to do my first refi (woot woot)! I am running into brick wall after brick wall.

Here is my situation. I own 3 properties in Canton Ohio, I currently live In WA state. The 3 properties are owned my LLC. I will have 1 year of landlord experience this October, 2023. The houses are worth roughly $85,000, each.

For one reason or another, I have not been able to find a lender that will lend to me either because I am out of state, they are owned under an LLC or the value is not over $100,000 for each individual property. I do not want to go Fannie/Freddie because I want to keep these properties in my LLC and the debt away from my name.

So my question is, who out there can help me refi these properties so I can rinse and repeat? THANK YOU!

Quote from @Ryan Engels:

Quote from @Nathan Harden:

Sounds like you are looking for a cosmetic flip. What areas have you been looking in? I saw someone on here post something about cancelled/expired listings, great idea! I have found that door knocking is rather challenging right now because if someone has a low interest rate, a lot of people have a hard time giving that up. If you can find an off market deal from door knocking, driving for dollars, mailers, etc. More power to you!

Thats why I think you will have better luck with cancelled/expired listings because at least then you know that the seller has been at least considering selling recently.

 Looking in North Tacoma, parts of Central Tacoma, Downtown Puyallup, and parts of Sumner. Have you had any experience in our area with flips?

Yes. I did a live-in flip in Orting. Ended up staying there a little longer than expected, about 2.5 years but it was nice because I was able to skip Capital Gains that way. Doubled our money in only a couple years so ended up working out very well.