All Forum Posts by: Nick Belsky

@Account Closed

Yeah, the average investor is not jumping into 100-units for a reason.  Financing would be a huge hurdle as well.  Even if you had tons of reserves, stellar credit, etc... you have no experience with something of this scale.  Very few, if any lenders, would take on that much risk.  If they did, it would accordingly expensive. 

If your partner is willing to start with something smaller then help you scale up over time, that may be the best option.  As with any deal, you need to assess your own risk tolerances and mitigate accordingly.  Even so, if you plan on using financing, whether private or agency, they also have risk tolerances and if you don't check all their boxes, there is no easy way to get financing.

Cheers!

@Isaiah Carrasco

I would say it all comes down to your liquidity and what your goals are.  Bank financing for a down payment may be a little tough as many don't like seller financing.  Not impossible, but you may struggle to find a bank willing to lend in this way.  A personal loan would work, or something that is not tied to the property as collateral.  That way your grandpa could stay in 1st position.  The beauty of seller financing is that anything can go so long as you both agree to it.  Would he be willing to do 100% financing for you?  Then maybe do lump sum payments to make up the down payment over time?  Literally, anything goes if you keep it all with seller financing.

Cheers!

@Michael Carbonare

Agreed.  Florida's slowdown is relatively mild compared to other markets.

I've got Fix and Flip clients in DMV, DFW, Seattle, New Jersey, and Tennessee markets who have had flipped properties sitting on the market for nearly 60-90 days now and their loans are getting close to maturing. I work mostly with flipper and builders, so sales are critical part of their loan exits. It's tying up their liquidity in equity and causing their businesses to freeze. While we have solutions to get them into extended bridges or even lease and move into DSCR, it's not ideal for many investors.

Be careful out there.  Be sure to adjust your strategies as these markets are shifting.  They may be moving slowing, but they are shifting. Yes, we are seeing a similar trend across the country in nearly every market.  Buyer's markets for sure.  If you plan on investing for long term holds and rentals, I'd say take a good hard look at some of your target markets.  You may get more wiggle room with sellers now than over a few months ago as these listings simply aren't moving as quickly.

Cheers!

@Erwin McClain

If you've lived in your current primary for 12+ months, there is no need to notify your current lender.  You will need to notify your current insurance provider that you are converting to an investment property so your coverage can be updated accordingly.

When obtaining financing for your new primary, you shouldn't get any weird conditions around your current primary unless you've been in it for under 12 months... If you are able to get a signed lease and deposit with first months rent on your current primary before closing on your new primary, you can also use that lease to offset DTI for the purchase loan.

Cheers!

@Kyle O'Brien

Yes, we work with several lenders who offer 90/100.  They've never stopped.  We can even do rural properties at 90/100.  100% financing in Texas... if the shoe fits, of course.

Cheers!

@Isaiah Carrasco

Welcome to the community!  Even being new to investing, you might consider a fix and flip loan.  You may be able to purchase with as little as 10% down and 100% of your rehab would be financed as well.  Once completed with the work, you could refi to perm and possibly get some cash back out of the equity you've added.

If you plan to move into it on one side, then you may look at an FHA loan with rehab. A bit more troublesome for paperwork and to qualify, but depending on your scope of work and budget and if you plan to house hack, it may be a viable option to consider.

I am on the financing side of things and would be happy to discuss various options and programs out there.  In terms of getting the property leased up, working with a local property manager may prove beneficial as well.  You can check on the Bigger Pockets "Build Your Investing Team" header to find just about any resources local to you or nationwide.

Cheers!

@Mike Douglas

As a broker who has brokered with them, I would avoid this lender at all costs.  Took them weeks to fund my client's draws.  Obtaining the payoff was way more complicated than it should be.  The underwriting process was also far more intensive than any other rehab/construction loan I've ever seen.  Far more cumbersome than a full doc conventional or SBA loan as well. 

Way better options out there without all the headaches and processing issues.  Are you working with a mortgage broker?  

Cheers!

@Chad Edwardson

Are you working with a mortgage broker on this?  You simply need the right lending resources.  Rural does add a layer of difficulty but many lenders will not be concerned based on your experience, comps, and the overall numbers.  If your other experience is also in the same market, that is a compensating factor as well.  

Would be happy to dig into this with you to see what resources we have that may be able to help.

Cheers!

@Jacob Hancock

Being paid with cash helps.  The larger issue for financing will be the low loan amount.  Many like to see loans in at least the $75k-$100k range.  You'll likely need to "cash out" some of the initial equity to get the loan with full rehab above $50k to even have a chance here.  You could also inflate the rehab budget to push the loan amount up.  A few ways to skin a cat here.

Cheers!