All Forum Posts by: Nick Belsky

@Matthew Hutchinson

You didn't mention purchase amount in your OP, but there is a stark difference based on loan amount how you may qualify as a borrower in the 5+ spaces. As many have pointed out, 5-10 units is doable with a traditional DSCR lender. The pricing is quite brutal compared to 1-4 unit DSCR loans. We are often seeing 5-10 units in the high 7's to low 9's right now. Whereas, 1-4 units are in the 6's to 7's. These loans are generally all going to be 30 year fixed rate terms with 30 year amortization and will require a personal guarantee.

Now, if you have a property that is $1,500,000 purchase or more, you may qualify for agency commercial lending which is pricing extremely well right now. Just priced out a $7mm purchase at 80LTV with a 1.4 DSCR at 5.92% with Fannie SML this week. Agency loans will look more like bank terms with 5/7/10 year terms, an 1/2/3 year interest only period and full PPP, but amortized over 30 years. Very attractive if you qualify for them and the asset class qualifies as well. These are all non-recourse loans with agency backing. Freddie SBL will be only a few basis points higher than Fannie SML, usually.

Simply another point of view to consider.

Cheers!

@Richard Mark

I do my best to avoid lenders who ask for upfront commitments.  For residential loans, it is very uncommon to be asked to pay a commitment fee or fees upfront other than an appraisal or credit check fees.  Even then, the payment is made by the borrower via payment link and not collected by the lender/broker.

For Commercial deals, upfront fees are more likely, but I wouldn't say common. Even for agency backed CRE, the lenders will ask for deposits, but they cover appraisals and due diligence costs. Some of the larger deals, say $25MM+, it's not uncommon to see $25k - $75k deposits for appraisals, due diligence, and initial underwriting.

Either way, lenders on all fronts are starting to cut their costs by either passing the costs to borrowers directly or charging the borrowers at closing. I've never had to ask a borrower to pay for HOA docs, VOEs, or various "third party review fees" up until about 6 months ago. They are becoming all too common now.

Cheers!

@Joven Aromin

I do quite a bit with Kiavi but they are geared more towards newer, less experienced investors. They are huge and, like any other HML, have their quarks for sure. There are many other options that are much more "draw" friendly to investors. However, I rarely have any of my clients complain about Kiavi. Their typical process takes 2-4 days to get your draw. There are exceptions to that, of course, but in general terms, that is what the process normally takes.

If you have at least 5 completed exits in the 3 years, you should be able to find comparable leverage, costs, and terms with other lenders who can offer a different process than what you are currently experiencing.  I am working with a few PML who are offering incredible pricing on FnF right now, well below 9% for 10% of purchase price and 100% rehab and 1 lender point.

Cheers!

@Timothy Fortin

If they are currently on one APN then every lender will treat it as a duplex.  Split the APN for each property then they will be treated as individuals.  Since you are not planning to hold them and sell them individually it makes sense to do this now or during closing.

Cheers!

@Account Closed

I am always perplexed when folks get hung up on gift funds for DSCR loans. There are so many nuances around it, why not use a DSCR lender who does not source or season funds to close? The ones I work with are within 25-45bps pricing with all the other lenders I see.

Cheers!

@Taylor J.

It's all about your experience, the address, the Scope, and the ratios.  We are seeing some lenders get very aggressive on hard money loans right now.  A few are doing 90% of purchase 100% rehab under 8%.  I haven't seen those kind of terms for a few years now, but am seeing them more and more for experienced folks.  

Are you working with a broker by chance, we can often help find the best lender that is a fit for you scenario...

Cheers!

@Mike S.

Sure there are. The issues that most run into though is the property doesn't cash flow enough to support a higher LTV or most lender require a minimum FICO to qualify for the higher LTVs... some lenders have other experience requirements and reserve requirements as well... all depends.

I priced out a 85LTV DSCR at 7.625% at par with a 3-2-1 prepay yesterday. That's pretty impressive. That lender requires a 740 FICO minimum to go over 80LTV. The DSCR calculated to 1.33 with that leverage and rate, so a pretty solid deal at first glance.

Cheers!

@Peter Vercellin

You just need to find the right lenders, that's all. The basic mechanics of DSCR are all pretty similar just different lenders have different investors backing their capital, so the guidelines and requirements can vary quite a bit. It can be a little tricky to navigate when there are so many options out there.

Are you working with a mortgage broker by chance?  We can be very helpful, especially when you are just getting started and lack resources.

Cheers!

Welcome to the community @Cody Hamling!

Be ready for a wealth of information at your finger tips. Be sure to explore all around the forums as well as many of the FREE tools that Bigger Pockets provides.

I am on the lending side of things and am always happy to hop on a call to discuss loan options that are out there, even if not offered by my resources. We are here to help you and each other, so ask away!

Welcome @Joseph Mena!

Be ready for a wealth of information at your finger tips. Be sure to explore all around the forums as well as many of the FREE tools that Bigger Pockets provides.

I am on the lending side of things and am always happy to hop on a call to discuss loan options that are out there, even if not offered by my resources. We are here to help you and each other, so ask away!