All Forum Posts by: Nick Belsky

@Tyre Carmon

Always begin with the end in mind... know your exit from renovations in detail before you start. Have a lender lined up, understand how they underwrite, and ensure the ARV comps you are choosing are ACTUALLY comps and not just the highest priced property with the same bed and bath count.

These two items alone would have saved several of my clients' mounds of trouble had they planned ahead in more detail.

Cheers!

@Bevin Bankston

100% financing is so expensive... It's not that hard to obtain 10% down with 100% rehab financing and your funds are going to equity, not into a lender's pocket.  You can potentially recover equity from the sale or refinance.  A typical hard money loan is likely going to cost you between 2-5% in points where 100% is easily 6-10%, if not more.  That is not counting higher carrying costs from a higher interest rate for 100% financing as well.  They are usually 13%+ whereas others are as low as 8-11% right now.

Most of our clients prefer the 10% down with 100% rehab funds.  They get in for less, flip within a few months to minimize carrying costs, then refi or sell out within 3-4 months from purchase.  Market values have been shifting lately so some aren't profiting quite as much as anticipated at the time of purchase, but they are still making money and adapting to the current market conditions.  Those who are refinancing to hold are still able to get cash out in most cases that we are seeing, some not.  We are still seeing 80LTV cash outs with DSCRs in the 1.50+ range in several markets around the US where others aren't quite getting to 75LTV and barely breaking even.  Each deal is different.  The exit is critical when deciding to go into the deal in the first place.

Cheers!

@Juan David Maldonado

You definitely need to let your carrier know if you alter the currently insured use of the property. STR policies typically do carry a bit more cost, but nothing too crazy from what I've seen. The last thing you want to have happen is be improperly insured and need to file a claim. The carrier may re-assess and have you pay back premiums or deny the claim all together... better safe than sorry.

Cheers!

@Mike L.

We can do NW Condos up to 80LTV.  Happy to discuss to see how the shoe fits.

Cheers!

@Jennifer Keyes-King

We do DSCR in Florida quite often. Happy to help get the best rates we can for the buyer.

Cheers!

Quote from @Jay Hinrichs:

Quote from @Nick Belsky:

Quote from @Jay Hinrichs:

Quote from @Nick Belsky:

@Mike Romano

We have a resource for no credit and no visa requirements for a hard money loan with rehab.  No entity needed, but preferred.  Typically, we can go up to 90% purchase leverage and 100% rehab up to 75LTARV.  Expect 12% and 4 points but can close fast.  For liquidity, we'd need to see cash to close, 6 months of fully drawn interest payments, and 25% of the rehab budget in a US bank account to qualify.

Cheers!

the OP says the borrowers plans for this to be his permanent residence .  So owner occ  HML  still possible ? 

Still possible, yes, but the OP cannot move in until the refi closes...

so HML cannot be used for owner occ and they would have to refi out of the HML to a loan that allows for owner occ correct or do i have that confused. ?  I run into this scenario occasionally.

Yes.  We run into this fairly often.  The HML is done as an investment, as with most HML and DSCR, the borrower cannot occupy the property.  Once a refi is done and the HML is paid off, they can occupy if the refi loan allows it.  I hesitate to do this with lite rehab loan where the borrower may still try to occupy before the refi.   In larger scope rehab loans, the properties are usually not inhabitable, so there is less risk of occupancy fraud.  One can split hairs on the investment piece for acquisition, but if it remains vacant throughout rehab and that is the intent to remain vacant until completion, then it meets the requirements.  We've had several end up selling once completed, a few ended up renting them out to hold, only a handful have actually occupied after refinancing.

Quote from @Jay Hinrichs:

Quote from @Nick Belsky:

@Mike Romano

We have a resource for no credit and no visa requirements for a hard money loan with rehab.  No entity needed, but preferred.  Typically, we can go up to 90% purchase leverage and 100% rehab up to 75LTARV.  Expect 12% and 4 points but can close fast.  For liquidity, we'd need to see cash to close, 6 months of fully drawn interest payments, and 25% of the rehab budget in a US bank account to qualify.

Cheers!

the OP says the borrowers plans for this to be his permanent residence .  So owner occ  HML  still possible ? 

Still possible, yes, but the OP cannot move in until the refi closes...

@Brandon Lee

If you can rent it and cash flow well enough, then keep it.  If not, sell it for immediate profit versus long term game.  We always go into a flip with the intent to sell.  But, once completed, if we find we are able to get higher rents and it meets our minimum monthly/annual cash flow targets, then we refi to hold.  We balance between the two and it's deal by deal.  

Cheers!

@Nikelyia Watersa

Happy to hop on a call to chat about all the various loan option out there.  There many types for sure...

Cheers!

@Cindy Cheng

This is a commercial loan.  Many will like to see you take down the property with a bridge loan, then stabilize operations for at least 12 months before trying to get a permanent loan at a local bank or credit union.  IF the borrower is strong enough, SBA may also be a possibility  

For a bridge loan, keep in mind there are hundreds of bridge lenders out there.  Expect 70LTV or so, 12% interest and 2-3 points to close.  You may have a little variation on these terms, but it will be close.

Cheers!