All Forum Posts by: Robin Simon
Robin Simon has started 636 posts and replied 3875 times.
Post: Need help with financing my real estate goal for rental propertys
#3 Private Lending & Conventional Mortgage Advice ContributorPosted - Lender
- Austin, TX
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Quote from @Christian Requejo:
Quote from @Robin Simon:
Quote from @Steven Goldman:
A little food for thought. You can use conventional financing to get started. However, as you build up a greater portfolio you will find that your portfolio will begin to impact your ability to get conventional financing. The more units you have the more complicated the underwriting for conventional financing. The value of using an HML is the HML will want a list of your properties and possibly a verification of payments on those mortgages. But, they will not calculate your D.T.I. and consider the complexity of your holdings. If you use the right lender this allows you to move more quickly. The 20 percent down will become more comfortable. If you want to scale up, you can always find a money partner who can participate in your LLC giving you more flexibility. Most of our multi-door borrowers have a money partner they use if they need additional down money because they are over extended. If you get a reputation for success in the real estate community it is easy to find money partners! Good luck.
This is very accurate - you are likely to have >20% down payment options for your next couple of properties, but if you want to scale at the pace you mentioned, you will need to move to "DSCR loan" financing with generally 20% minimum down to scale
Its less of a hard number, vs. how long until your DTI calculation doesn't work anymore
Post: Need help with financing my real estate goal for rental propertys
#3 Private Lending & Conventional Mortgage Advice ContributorPosted - Lender
- Austin, TX
- Posts 4,576
- Votes 4,423
Quote from @Steven Goldman:
A little food for thought. You can use conventional financing to get started. However, as you build up a greater portfolio you will find that your portfolio will begin to impact your ability to get conventional financing. The more units you have the more complicated the underwriting for conventional financing. The value of using an HML is the HML will want a list of your properties and possibly a verification of payments on those mortgages. But, they will not calculate your D.T.I. and consider the complexity of your holdings. If you use the right lender this allows you to move more quickly. The 20 percent down will become more comfortable. If you want to scale up, you can always find a money partner who can participate in your LLC giving you more flexibility. Most of our multi-door borrowers have a money partner they use if they need additional down money because they are over extended. If you get a reputation for success in the real estate community it is easy to find money partners! Good luck.
This is very accurate - you are likely to have >20% down payment options for your next couple of properties, but if you want to scale at the pace you mentioned, you will need to move to "DSCR loan" financing with generally 20% minimum down to scale
Post: Short Term Rental Financing
#3 Private Lending & Conventional Mortgage Advice ContributorPosted - Lender
- Austin, TX
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Quote from @Michael Baum:
Thanks @Robin Simon. That is pretty interesting to rely on AirDNA. In our area it was waaaay over and we would have never made the projections.
It's definitely not 100%. Any markets that don't have a ton of comps (especially if its a high bedroom/bathroom/guest count) can be skewed. Even some markets may be 100% dialed in on AirDNA for projections on 1BRs, 2BRs and 3BRs, but completely glitches out for 4BR for example (if there aren't any other 4BRs in the proximity) - Ironically, if AirDNA doesn't work, it could be an advantage to you if the market is under-saturated with high guest count properties
Post: sources of DSCR lending
#3 Private Lending & Conventional Mortgage Advice ContributorPosted - Lender
- Austin, TX
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Quote from @Riaz Gillani:
It's pretty unlikely to get a DSCR loan from a Credit Union. It's tough to keep these loans (given they're usually 30 year terms) on one's balance sheet (if not impossible). Luckily the 10-12 national players have a nationwide reach. Give whomever you see in the forums a quick message and schedule a phone call to chat and discuss what the process looks like.
Red Flags: Placing a Deposit, Extremely Low Rates (There's nothing in this space below 5.99% and even that's pushing it), very high LTV's (I've never seen anything higher than 85% and again, that is pushing it...). Like someone mentioned above, these loans are either boarded onto a warehouse line post-closing or included in a mortgage pool to underly a securitization. You can't really stray away from the pact ....
I wouldn’t say putting down a deposit is necessarily a red flag if the company has a reputable presence. On the contrary, handing out term sheets like candy (desperate for borrowers) can be a red flag
Post: HML & DSCR in one lender?
#3 Private Lending & Conventional Mortgage Advice ContributorPosted - Lender
- Austin, TX
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Quote from @Eliott Elias:
Get with @River Sava and Easy Street capital. They have a good track record and do HML and DSCR
For Sure - regarding Keco Capital - best way to gauge reputation / legitimacy is google - I googled them and didn't see any red flags, but didn't see any reviews. Always safer to go with a lender with a long track record and strong reputation, backed up by public testimonials and reviews on a place like Google
Post: Selling Our Cashflowing Airbnb
#3 Private Lending & Conventional Mortgage Advice ContributorPosted - Lender
- Austin, TX
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Agreed - find a good agent that has experience with selling investment properties (esp. STRS). The facebook group AirBNB homes for sale is also very large and a good place for these
Post: $366k + 9 properties Need loan help!
#3 Private Lending & Conventional Mortgage Advice ContributorPosted - Lender
- Austin, TX
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Thats not a lot of room for a cash-out refi or even a HELOC. I think your next step should be to look for a purchase with your $366k as funds for down payment and some reserves
Post: $366k + 9 properties Need loan help!
#3 Private Lending & Conventional Mortgage Advice ContributorPosted - Lender
- Austin, TX
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What is the equity you have in the nine properties (are they leveraged with debt). Also important, is what is your current rate on the loans on those nine properties (if not too low, cash-out refinances on those would be a great strategy)
Post: Negative COC ROI 1st year OK?
#3 Private Lending & Conventional Mortgage Advice ContributorPosted - Lender
- Austin, TX
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Quote from @Matt H.:
Quote from @Robin Simon:
The numbers make sense but... what kind of loan is the mortgage going to be? Need to be careful there that your primary lender (the other 80%) will be OK with having a second hard money loan on the property
Thank you, Robin. Numbers seem to make sense no matter how critical or conservative I try to be. Yes I agree, I would need to point that out to the primary lender. For now, I've only looked at a conventional loan.
Post: Negative COC ROI 1st year OK?
#3 Private Lending & Conventional Mortgage Advice ContributorPosted - Lender
- Austin, TX
- Posts 4,576
- Votes 4,423
The numbers make sense but... what kind of loan is the mortgage going to be? Need to be careful there that your primary lender (the other 80%) will be OK with having a second hard money loan on the property