All Forum Posts by: Noah Wright

Quote from @Matt Ridenour:

Hello BiggerPockets fam!

I'm at BPCon this week and I'm striking out on my biggest need of the week.  BTW what an awesome event!  First time attending but won't be the last.  

My wife and I are small time investors.  We have about 4 million in mortgaged assets, but about 2 million in mortgages.  We do our own construction work which is how we build our equity.  

I'm looking for a commercial portfolio loan that wraps these properties into one loan, with the excess equity available as a line of credit.  I don't want to cash out refi because I don't want to store the cash and pay for it.  All I'm looking for is a pool of money I can use as a line of credit against my equity so that I can move quickly for fix and flips.  

Anyone have suggestions?

Thanks so much in advance!

 There are roughly 28 wholesale lenders and 14 direct lenders who can help, I'd be happy to help you shop around for the lowest bid 

Quote from @Koren Lavi:

@Brandon Gale

This might be a really bad tip, but one thing thats really helped with my frustrations is using ChatGPT to write responses ...

 WOW this is super smart. Plus, as long as you're addressing legitimate concerns and providing good service where it counts, finding a way to keep the stress in check is essential for staying positive in the business! Thanks for sharing the tip, it might help others maintain their sanity too!

Quote from @James Jeffery:

Hi,  I am looking for a lender to refinance a land development deal . Looking for a loan of 1.5M to complete the project which will then be a mid term rental and AIRBNB with an estimated value based on cash flow of 3M.  Current debt is about 650K. New build will be 5,000 sq feet elevatored building of four units right on the beach and ideal for weddings, airbnb and corporate events.

Address?
Please send over the itemized budget to include costs spent to date and remaining dollar amounts
Plans?
Please list borrower's amount of experience within the last three years?
Funding timeline?

We can get this done on fantastic numbers

Fantastic property, happy to lend on that

I can get the small multifamilys done for sure on fantastic numbers. Would love to learn more about the mixed use as well, do you have a moment to call? 

You make some excellent points regarding the impact of higher deposits on finding the right property. Increasing your down payment can indeed make the asset cash flow positive, even if it reduces your cash-on-cash returns. This approach helps mitigate risk, especially in a fluctuating market, by allowing you to weather potential downturns.

Your strategy of going long on USD and short on AUD is intriguing, and it's smart to consider how the currency exchange dynamics will affect your investments.

Regarding the Austin market, there has been notable activity in the lower end and affordable housing segments, with many buyers entering the market as they look for opportunities. Prices in those segments have seen upward pressure, similar to trends in other rapidly growing areas. It might be worthwhile to focus on neighborhoods that are on the cusp of development or have strong local amenities, as those often see the most appreciation over time.

Hi Cody, welcome to the community! It's great that you're already thinking about real estate investing at 22. Being in the Army will provide you with some unique benefits to help you get started. One key advantage is the VA loan, which allows you to buy a home with no down payment and competitive interest rates, making it easier to purchase property.

As you continue to invest, you can use rental income to help cover mortgage payments or expand your portfolio over time. Many service members begin with a house-hack strategy, buying a multi-family property (e.g., duplex) and renting out one unit while living in the other.

Feel free to reach out if you want more details on how to get started, or advice on your first steps in the real estate world!

Thanks for your thoughtful reply! You raise some excellent points regarding DSCR loans and the broader economic context. Let me address your questions and provide additional clarity on key aspects:

1. Delta of Offered Rate vs. Traditional Lending for Investment:

DSCR (Debt Service Coverage Ratio) loans do generally carry a slightly higher interest rate compared to traditional investment loans, typically 1-2% more. The advantage, however, lies in the flexibility—no income verification, minimal red tape, and more lenient underwriting. For a foreign investor, the red tape for a traditional mortgage can be excessive - to say the least. This might offset the rate difference, especially when conventional financing isn't as easily accessible due to strict income or employment documentation requirements.

2. Lock-in Period or Terms:

Lock-in periods for DSCR loans typically are a 5-year stepdown prepayment penalty, this is a good balance between flexibility and cost, but they offer flexible term lengths. While it's true that locking in rates for a longer term can seem counterintuitive during steep yield curve normalization, you can remove prepayment penalty altogether if you are comfortable with a higher interest rate. It's important to align the lock-in period with your investment horizon and risk tolerance, we can explore this further in a comprehensive consultation.

3. Early Closure Penalty or Refinancing:

Most DSCR loans come with an early prepayment penalty during the fixed period, but this can vary by lender. Some offer declining prepayment penalties (e.g., a 5-4-3-2-1 structure) where the penalty decreases each year, and others waive penalties after a certain number of years. As for refinancing, it is generally possible, but evaluating the costs, including closing fees and any additional points, is key.

As a side note, you are obviously concerned about interest rate, and this can make a difference of hundreds dollars per month, but I see clients with properties where the monthly lease is 2x the monthly mortgage payment. Even at 10% interest rate they would be making a lot of money each month, so they are unconcerned about a 7% interest rate. For them the focus is on rapid and easy expansion...

4. Borrowing Under Company or Trust Structures:

Yes, DSCR loans are well-suited for borrowers using LLCs, trusts, or other legal structures. This is one of their biggest advantages as they often bypass the personal liability and credit reporting of traditional loans. Many investors use LLCs or trusts for tax benefits, asset protection, and estate planning, so this flexibility can be a significant advantage.

5. Higher Deposit (Down Payment) for Favorable Lending:

Offering a higher down payment, like 30%, often does result in more favorable loan terms—lower rates, higher loan-to-value ratios, and less stringent underwriting. This might reduce your overall interest costs and allow you to secure a more attractive rate compared to a traditional 20% down payment scenario.

Platforms for State → City → Suburb → Street Analysis:

For narrowing down markets, here are some platforms I recommend:

• Zillow and Realtor.com for broad market data, filtering by city/suburb/street.
• Roofstock for turnkey rental properties with in-depth neighborhood analysis.
• Mashvisor for detailed real estate analysis, including cash flow and rental estimates.
• Redfin and NeighborhoodScout for granular street-level data, crime statistics, school ratings, and property value trends.

Once you narrow down to the city level, I agree that leveraging local resources—real estate agents, local investor networks, or property managers—will be key to gaining more granular insights on specific neighborhoods and streets.

If you'd like, I can also provide you with a sample DSCR terms sheet to further illustrate potential terms. Feel free to reach out if you need more insights!

Best regards,

Hi Francis,

Welcome to the BiggerPockets community! It's awesome to hear that you're growing and learning more every day, thanks to the incredible support and shared wisdom here. This is truly a fantastic place to connect, learn, and continue growing your real estate knowledge and network.

Keep up the momentum, and feel free to reach out if you ever want to share more about your journey or need advice. Wishing you continued success!

Best regards,

Hi Jude,

Welcome to the community! It’s fantastic to hear your journey in real estate investing, especially after such a long history, starting in Washington DC and now reigniting that passion with your wife in Charlotte. It’s amazing how life can come full circle, especially with your roots in Birmingham, Alabama, where you’re now building out your next venture.

Flipping homes is a great way to start, and transitioning into the BRRR strategy for rentals sounds like a solid plan, especially with the growth in select Southern markets. The BRRR method is a favorite for scaling, and I'm sure you'll gain a lot of valuable insights as you make that transition. You'll also find plenty of advice here from seasoned investors to help refine your approach!

Feel free to connect if you want to discuss any aspect of the process or share updates on your projects. Looking forward to seeing your progress in Birmingham and beyond. Wishing you much success on your upcoming flips and your shift into rentals.

Best regards,