All Forum Posts by: Stephanie P.
Stephanie P. has started 186 posts and replied 4622 times.
Post: BRRRR METHOD CASH OUT REFI-ARM VS. FIXED RATE
#5 Mortgage Brokers & Lenders ContributorPosted - Washington, DC Mortgage Lender/Broker
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Quote from @Lorien Breece:
I'm similarly looking down the road to the refi of a property I bought under my LLC's name (cash purchase). I had planned on a DSCR loan, but recently was told by a lender that I would be able to cash out refi into a traditional mortgage at 80% LTV, which is great, but I don't know if I've shot myself in the foot originally purchasing through the business. I didn't previously think I would qualify with my personal debt:income (I know, I should have done this research first...) My question here is what are the pros and cons of refinancing into my own name vs. the LLC, and what are the hiccups I'm likely to encounter?
If the LLC is a single member LLC and the member qualifies on their own, then it can be done with Fannie Mae since 2017 and now Freddie Mac since last year. Here's a BP thread that's a good read.
Post: Vacation home Loans- 10-15% down vs. DSCR
#5 Mortgage Brokers & Lenders ContributorPosted - Washington, DC Mortgage Lender/Broker
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Quote from @Devon Harris:
Hello Bigger pockets members. Anyone have advice on mortgage lenders that provide 90%LTV in Ms for a vacation home loan?
It's always best to exhaust your conventional financing options before venturing into DSCR (and I'm a DSCR broker). The money is cheaper and although the qualification is more difficult, worth it in the long run. You should be able to get a 90% 2nd home with conventional financing if the lender doesn't have overlays.
Post: Conventional loan options
#5 Mortgage Brokers & Lenders ContributorPosted - Washington, DC Mortgage Lender/Broker
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Quote from @Chris R.:
I currently own a commercial building on NNN this building currently has an SBA loan as a run the business inside the building. I am currently set to close on the sell of the business in the coming months. Because it is an SBA loan my understanding is that I must pay off the loan at the close of the business sale. How could I go about getting a conventional loan on the building so that I can use that cash to purchase another property?
Bonus what is this property worth? We are in Aurora CO the building is 7000sqft the rent is $11,750 + NNN per month.
If you have significant equity, you should be able to cash out to 75% of the value and pay off the SBA loan, even before the business is sold.
Post: Rent primary residence or sell
#5 Mortgage Brokers & Lenders ContributorPosted - Washington, DC Mortgage Lender/Broker
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It's all math. You've done the bulk of it. What does the math tell you?
Also, never try to time the market, but most people feel we are getting ready for a correction so if you need the cash to make your new business fly and that cash will make you money, I think the math tells you to sell.
Post: 10 days to closing and lender denied loan due to taxes issues
#5 Mortgage Brokers & Lenders ContributorPosted - Washington, DC Mortgage Lender/Broker
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Quote from @Alejandro Gonzalez:
Hi everyone.
I need help urgently.
I've been working with a credit union for at least 3 months now.
After a long time looking for the right property, 3 weeks ago or so I found the house and is now under contract.
To put everyone into perspective I have 2 rental properties and a 3rd one (primary home with a mother-in-law suite) that is my primary (soon to be a complete rental)
I have good W2 income, plenty of cash in the bank and my properties are cash flowing strong at the moment, however due to certain initial investments and the way my taxes were filled the last 2 years the bank is now (10 day to closing) telling me that they can not use my rentals as income so my DTI is now completely different, now the "only" income I have is my W2, this morning I received a call from the bank after 3 days trying to reach them to find out about all this that I'm sharing.
Is there something I can do, any lender that can give me a hand so I don't lose the deal?
Sincerely,
Alejandro
Go with a DSCR loan for the new property and call it a day. You'll probably have to get an extension to the contract, but you should be able to close in under 30 days since you have all of your ducks in a row. Taxes aren't required nor is W2 income, so as long as the new property is cash flowing and you have decent credit, you should be good.
Stephanie
Post: Cash Out Refi or DSCR in GA
#5 Mortgage Brokers & Lenders ContributorPosted - Washington, DC Mortgage Lender/Broker
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Quote from @Jermaine Morgan:
Hey all… I'm a realtor and investor in GA. I've been flipping homes using my own cash for maybe the past three years. I closed my first deal using hard money today. I also buy foreclosed homes cash often. I want to leverage more and also looking to began keeping properties. All of my properties are under 75% LTV. Is it best to do cash out refi or DSCR? I've like to get out the deal asap as the lender fees build up quickly.
90 days is the shortest to use 30 year or 40 year interest only financing. It's worth it to wait, but as others have said, rates are moving and moving hard in a bad direction. In March, we were pricing loans at 3.99% and now most of the loans I'm pricing are in the 7's and 8's and I'm not alone.
Post: What Funds Must I Still Have if Getting $100K Back On DSCR Refi?
#5 Mortgage Brokers & Lenders ContributorPosted - Washington, DC Mortgage Lender/Broker
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Quote from @Burt L.:
I've been in a long haul on a smaller multi-family rehab and watched the rates almost double.
I still have a 1.2 DSCR as it was a strong buy but am finishing with very little monies in the pocket. I will have $350K+ in equity with taking $100K or so in cash-out at close. I"m finishing the project with very little left and lenders still want to see bank statements even though the loan is property-based. I"m told I can use the proceeds of the refi as my 6 months reserves.
What will lenders be looking for in my bank statements. A potential lender said they are just looking to see that there are no NSF checks written but I didn't fall off a turnip truck yesterday. What are they more likely looking for?
I've had to increase the scope of the work and decrease the finances to do so. I didn't think that bank statements were needed on DSCR's at all but it appears that I'm incorrect.
Many thanks for your input.
Your loan proceeds can be used for reserves, but almost every lender we use still requires to see 2 month's of bank statements. Generally they're looking for money management (no or very few NSF's and large deposits).
If you don't have a lot in the bank after the renovation and you're getting significant cash out, there should not be an issue. If the property is fully leased, they'll use the income from the tenants for the DSCR number and if it's not, with a reduced LTV, they'll use the comparable rents.
Hope that helps
Stephanie
Post: Have loan/money questions
#5 Mortgage Brokers & Lenders ContributorPosted - Washington, DC Mortgage Lender/Broker
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Quote from @Keith Blakeney:
On brrr strategy can you get your rehab money included in your loan? Realistically, if so, how likely are lenders to do this and are u killing your refinance potential before you even start?
The key to this type of strategy is to buy it right. A house that's going to need rehab is not going to sell at the top of the market; actually far from it. You should look for something that's around 50% of the top of the market and then only put another 20% back in for rehab. Then you've got a solid deal that you can purchase, get all of the rehab financed and then refinance into a long term loan product.
It's two products; the first is the acquisition and rehab loan and the second is the long term refinance.
Post: Qualifying for a Cash Out Refi ?
#5 Mortgage Brokers & Lenders ContributorPosted - Washington, DC Mortgage Lender/Broker
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Quote from @Joshua Carter:
Quote from @Stephanie P.:
Quote from @Joshua Carter:
Hey folks! Big time fan of the community, first time posting here.
I'm hoping to purchase my first investment property by the end of the year and hope to implement the BRRRR strategy. I am looking for insight/advice about qualifying for a cash out refinance loan. I have a pretty nice nest egg of cash available that I plan to buy and rehab a property with (approx. $100k), however I'm curious/concerned I won't qualify for the refi loan. As it stands, I only make $50k/yr. but am also considering leaving my current w-2 job and going back to being self employed in the trades as I've done in the past.
Does anyone have insight around what I'll need to qualify for the refi loan in general, and if a recent career change will be hurt my approval odds? Or any general tips given the situation Ive laid out in? I just purchased my first home 2 years ago, so I'm pretty novice to the whole loan process in general. I'm doing my best to do my due diligence before I start making big moves.
Thanks in advance!
Use your nest egg to buy a smallish property for cash. Then move in. Then do a DSCR loan to refinance the current property (up to 75% loan to value). Your personal income or employment doesn't come into play and the market rents set by the appraisal's comparable rent schedule will be the income for the property. Even if it's vacant, you'll be able to get 70% loan to value. The key is that you don't live there anymore because they are for non-owner occupied only. You won't qualify for owner occupied if you leave your W2 job unless you get a bank statement loan and most of those are for self-employed borrowers.
Thanks for your reply Stephanie,
I'm unclear as to why I would need to move into the newly purchased property from my current home? I've been looking towards a DSCR loan as a potential answer to my dilemma, why could't I do a DSCR to refinance the new property? It would be a non-owner occupied investment property. What am I missing?
Thanks again!
You're on it. I was thinking you were going for an owner occupied property. Yes, just do a DSCR loan for the new property and you're good to go. Let us know if you need a broker.
Post: Financing Multifamily (1-4 units) w/o Having Money Saved & No Job
#5 Mortgage Brokers & Lenders ContributorPosted - Washington, DC Mortgage Lender/Broker
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Quote from @Eliott Elias:
It's possible if you use a non qualifying loan such as a DSCR loan
The likelihood of being able to get a transaction done without cash for down payment or reserves is not very likely. I haven't run into any seller held mortgages for 100% of the purchase price. Even on a DSCR loan, you're limited to 80% of the purchase price for the most expensive loan meaning you'll have to come up with 20% for down payment, then there's closing costs and for many lenders, reserves.
As some have said, find a partner or you could find deals and then wholesale them until you come up with the cash to do your own deal. You've got to walk before you can run.
If you have a job, purchase a multi family with FHA and live in it while other people pay the mortgage with their rents. Do that a few times and you're off to the races.
Stephanie