All Forum Posts by: Salvatore Lentini

@Jon Kelly Rates of 8-9% for hard money is going to be hard to find with rates heading up.  Long term rental financing is 5.25 - 6.5% on a good day now!  I haven't done hard money in a while but 8-9% sounds like numbers from a couple months ago.  What company are you with?

@Steven Harris - Make sure your numbers are accurate.  Do you have a good handle on how much rehab will cost?  Do you have really dialed in comps?  Does the HM lender have a minimum number of months for the loan?  If you finish in 3 do you still have to pay for 6?  Any fees at the end of the loan?  HM loans are great for the purpose they serve.  Even investors that have money use them because it allows you to do more than one deal at a time.  But it is very very expensive money and you want to hold them for the shortest amount of time possible as they can make your profits evaporate.

@John Wilson I concur with @Ryan O'Mara. No doc doesn't really exist. There are varying levels of "low doc" loans. The main component that concerns most investors looking for this type of loan is whether or not the lender underwrites your loan based on W2 income and your tax return. The investor friendly lenders I work with for my portfolio do not. Your rate will be based on credit score, experience, LTV, location and DSCR (basically cashflow). What type of commercial property are you looking at?

@Blesson Biju Alexander . - Also, the increase in value doesn't have to come from appreciation alone.  You can increase the value by implementing forced appreciation.  Fill vacancies, increase rents, add additional streams of revenue (laundry, vending, cell tower, appliance rental, pet fees, application fees etc) and decreasing expenses (I recently brought down waste removal on a commercial property from $1500/month to $680/month thru negotiation and pitting 3 companies against each other with no change in service) that's an increase of $164,000 for the property if you factor in the $820 savings/month x 12 = $9840.  Divide $9840 by a cap rate of 6 (the cap rate when we bought it 6 months ago).  So get creative!

@Adam Pervez - welcome!  If you have any specific questions feel free to reach out to me.  Happy to help.  I started out 8 years ago and now I'm living off my rental portfolio.  A big part of that was using investor friendly lenders.  

@Patrick K.  You need to find investor friendly lenders.  The ones I work with for my portfolio and others I help get funding, don't care if you have 10+ investment properties.  Actually, quite the opposite, you'll get better terms with them the more properties you have because you have experience and are considered less of a risk in their models.  Happy to put you in touch.

Hi @Taryn Mitchell - Welcome!  I was new 8 years ago and have built a rental portfolio that I'm close to retiring on.  Feel free to message me with any specific questions you have.  Happy to give back.

@Jane Grimm - what's the value of each property?  On purchase and straight refis some banks will still do 80LTV but all that I know are at 75LTV for cash outs now.  Some are even at 70LTV depending on value of the property and location.  I work with investor friendly lenders for my portfolio and have helped others get loans but it depends on value, location and credit score.  They don't require W2s or tax returns.

@Brian M. - I would become a money partner.  Find someone with experience that has more time than money.  If you don't have time you need your investment to be more passive.  I work with money partners on all of my deals.  I have 168 rentals and I was only able to get to that point because of working with private investors.  In the beginning I borrowed money as interest only loans but now I bring my private lenders into the deals.  They get equity instead of interest.  So they get to participate in the benefits of real estate such as: principal pay down, tax benefits, cash flow, appreciation and forced equity (which is my specialty).  If you work with someone that has experience they'll be able to generate a much bigger return for you than you'd be able to on your own with no experience.

@Tyler Buck - You need to figure out the viability of putting in a bathroom and kitchen in each classroom.  Depending on the building, there's likely no plumbing in the classrooms.  If the school is on a slab you're going to have a difficult time cutting in plumbing (literally cutting it in through the cement slab).  If it has a basement you'll be in a better position.