All Forum Posts by: Sanat Bhandari

@James Sloan Most people include partnerships or limited equity type situations when they're referring to the amount of doors they have 

Doors is a fairly meaningless metric in my opinion. What's more impressive is the financials on those doors. Are all those doors cash flowing? Do they have low vacancy? What kind of properties are they? How good are the operations? Quality > Quantity is the key here

I know guys with lots of doors who bought subpar stuff and they generally pay for it one way or the other (bad tenants, losing money on liquidations etc) because, more often than not, emotion (As Jon Kelly said, fame of a 1000 doors > 20 doors) gets in the way

Being well capitalized (partners, LOCs etc) is great but what's even better is when you buy a deal with solid financials and fairly low, well-measured risk going into it

@Alexandra Arnhold I second John Warren's suggestion

Non-warrantable condos are commercial lending territory since GSEs such as Fannie/Freddie don't usually buy them (there are exceptions to this though) 

Your best bet is local banks/credit unions/mortgage broker who knows how to handle non-warrantable condo scenarios since this will be a non-QM product

I have a couple resources in the Chicagoland area who could help you out with the same. Feel free to reach out 

@Gregory Cudzilo Banks only care about them getting their payments, not what you do afterwards (they care on paper but not really) 

The HELOC would stay in place till its duration. Keep in mind though that if/when you try to refinance the HELOC, the bank may try to switch you to a CLOC (Commercial Line of Credit) which has a higher rate and not as favorable terms

@Todd McNeely That is possible but you're looking at a lower LTV for a hard money lender to fund the deal, which seems like you have

The term is generally 12 months so have a plan to refinance by the end of it. Feel free to PM me for any help

@Owen Dashner may be able to help? 

@Noah Thompson What kind of a property is it? 

Sent you a PM

@Christian Jones Great job, sounds like a solid deal! This seems a perfect candidate for a portfolio cash-out refinance to get the equity out to do the rehab 

Hard or private money from a local lender is another option but if the properties are leased, then a portfolio loan could be a better choice

@Branden Wilkinson BRRRR is a great strategy to use as long as you know what you're doing since it can be a complex process with lots of moving parts to it

On top of 3.5% FHA that Andrew mentioned, you can do 3% down conventional if the property is a SFH. If you're dead set on a multifamily, 3.5% FHA would work for all the way up ton 4 units (however, there are extra qualifying requirements for the same, make sure your lender knows how to navigate those)

If that's not an option, JV'ing with another investor might be the way to go. You'll learn the power of partnerships without it being as daunting as a proper syndication and is the perfect step into more complex partnership structures and investments

@Patrik Kusek While there are DSCR lenders that can do <$150,000 loan amounts, that is generally not the norm and is more troublesome than it is worth in most cases (that's why most DSCR lenders don't do <$150,000 loan amounts)

In your situation, I recommend working with a local bank/credit union since they have the local area expertise and are far more likely to work with you on the cash-out with swift (even minimal) underwriting. Since they're lending their own money (portfolio lending), they make their own rules vs DSCR which has to follow extensive investor guidelines for being sold in the secondary market

@Maribel Manibo I don't recommend subto for a primary residence if you're already pre-approved at 3.5% down

Primaries have the best financing out of any real estate out there period. I recommend utilizing your lender for this one and utilizing subto for future transactions when you have more experience investing and are well-capitalized to take on the additional risk of the same

If this doesn't work, then it all boils down to what you negotiate with the seller regarding the financing terms. It is possible, albeit highly unlikely, to get better financing from the seller versus the bank. Essentially, you will have to pay the agent commissions, all closing costs, and downpayment to the seller for his portion of equity including the payment to the first lien holder on the property. Make sure to get this all in writing via a solid PSA (purchase & sale agreement) and have a competent title company working on it

@Robert Rutledge That's not a bad deal at all considering the loan amount since most DSCR lenders have a rate hit on loans <$150,000. I would negotiate the PPP from 5 yr to 3 yr (much less exorbitant without that big of a hit to the rate). At a 7.5%, your rate should be around 7.75% for a 3 yr PPP

Feel free to PM me if you're looking for more insight into DSCR loans. That's my bread and butter so pretty familiar with the whole process