All Forum Posts by: Michael Nerby

Target projects that will achieve a minimum of 1.2 DSCR

You will have a much easier time getting folks interested in your opportunity

I have done a few DSCR loans. What are your specific questions on it?

There are thousands of lenders out there that will offer a DSCR product. I would recommend a google search, call 100, find the top 5 in that 100. Have them get you a term sheet based on your deal.

I love the DSCR style loans, fairly simple to get approved for, higher rate for the convenience.

The lender just wants to make sure you can service the debt payments. 

To quickly determine if a deal will pencil: Divide your NOI by your mortgage payment. You want that number to be 1.2 or greater.

NOI/Mortgage= DSCR

Example:

Gross rents: 10,000

Expenses: 4,000

NOI: 6,000

Mortgage: 4,000

6,000/4,000 = 1.5

DSCR = 1.5

In this example, the lender would approve this loan because the DSCR is above 1.2

Have you considered selling the land to a buyer with terms? You could collect a down payment then collect some cash flow

Hello,

Looking for analytical advice on how to calculate whether or not to keep a project. How do I figure out definitively if keeping a property is the best use of equity? Which key metrics should I be savy on calculating in order to make this determination? 

---

Basics: 

Purchase: 405,000

Construction: 320,000

Soft Costs: 25,000

ARV: 1,200,000

Gross Annual Income: 86,640

Estimated expenses: Tax 8,000 Insurance 1,800 Maintenance 4,332 Management 4,332 Utilities 4,800 Reserves 4,332

Annual Expenses: 27,596

NOI: 59,044

---

Is it better to keep this project and takes the profits now or better to cash out refinance and keep larger portion of the equity in the project? 

Your help is greatly appreciated. Thank you

Jeremy, 

How are things going? Any further updates on progress? 

What type of structure are you setting up on the back end?

What type of returns are you promising your investors? 

What returns are you receiving from loaning the money? 

Thanks.

hey everyone! 

Just taking a second to say what's up! Been listening to a few podcasts, love the show and thought I'd see what the website is all about. 

I'm an agent in the area, I can help investors find and sell property. 

I myself look for multifamily buildings to invest in. Continually learning and growing!