All Forum Posts by: Nate Herndon

Hi Martin, welcome to the forums! Here are some quick notes that I can provide from the lender/broker perspective. I would say you are off to a good start just by showing interest and enthusiasm for the investment business.

o Age: many private lenders require someone to be 21+ years of age. I personally work with one program that does not maintain this requirement. I have yet to close a deal for an 18-20 year old, though.

o Financing: the max eligible financing for a purchase of a property on a 30-year fixed is 80% LTC - requiring a 20% down payment. Financing does exist to provide 85-90% LTC for rehab loans, but still requires 10-15% down + closing costs + reserves to start your rehab. All-in-all, without some wildly creative solution, you have to have some of your own money in the deal. Investing is just that: Investing your funds into property and yielding a return on that money some time later.

Good luck out there! Happy to connect if the above parameters sound doable for your first deal scenario.

I think if it is one lease then I have a program solution for that. The issue is typically when there are multiple leases and it looks like rent by the room. We will probably be capped on income at the LTR market rents on the 1007 report, but happy to take a look if you can shoot me an email.

Hey @Dominic Pizzi, how is the lease set up?

Am I seeing that right? 6.2% in "loan costs" and a 9.875% rate? Pretty steep stuff man. Though we cannot assist with owner-occupied, DSCR loans are typically going to be 1.5-2% origination + $1500-$2500 in underwriting/admin/legal fees.

Rates are in the 7.25-7.875% range on a purchase.

Hey man, sounds like you have a great business model going - condotels are wildly difficult to finance though. The only programs I have seen that will do such a thing are non-QM loan, which differ from the DSCR side.

@Casey Adams @Clint Jusino There's a few programs that I utilize routinely for my clients on the 90-day BRRRR refinance for 75-80% LTV. I know that searching for financing sooner than that is appealing, but the best rates that I have seen all require closing after 90 days of ownership.

I will usually kick things off around day 60 of ownership and plan to close within four weeks of that. We can discuss further when you are ready for a deal review!

Hi @Anne Doyle, that's a great question. I utilize quite a few DSCR programs for my clients that, like @Brandon Beardt mentioned, do go down to a minimum loan amount of $50k, or in some cases $55k.

Here is an example of one such program with a minimum property value requirement of $75,000. I have had the chance to put that minimum loan amount to the test lately and I am closing a $51,200 loan on a small Birmingham, AL property next week.

To second what @Sasha Mohammed outlined, it sounds like you owe $435k on a $450k property?

You are going to be maxed at an 80% "rate/term" refinance ($360k loan) in which you will be bringing cash-in...not taking cash-out. As Sasha stated, that is at least $75k you need to bring to cover your current debts alone, plus closing costs on top of that.

Leave the $280k @ 4.25% in place and find some way to pay off that construction loan. 

Hi Jack - Bigger Pockets is a great place to start. For example, I work with dozens of national private lenders who fund rehab projects, new construction, and 30-year fixed loans for rental properties. As a broker, I'm always trying to find the best deal for the specific client and property.

If you are looking for local private money lenders, your local real estate investment groups might have some leads for you as well.

Most institutional private lenders are going to need an appraisal/valuation of the property, and permits to be issued for the construction of the building (if your area requires it). 

Typically the max loan that I have been able to get for clients on land acquisition has been 40-50% LTC. However, the lender that I utilize for that with my clients has not sourced funds from their account, so a personal loan or funding otherwise is still possible to bridge the gap.