All Forum Posts by: Stephanie P.
Stephanie P. has started 186 posts and replied 4622 times.
Post: Can I cah out refinance with no reserves?
#5 Mortgage Brokers & Lenders ContributorPosted - Washington, DC Mortgage Lender/Broker
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Quote from @Julie Mogyorosi:
If I have a 4 unit worth $400k, I still owe $115k on the mortgage… can I do a cash out refinance even with no reserves in the bank? 698 credit score. I would use money from the cash out to make a reserve + buy my partner out. Any help would be amazing, thank you!!
Hey Julie
First to answer your question, yes, there a numerous lenders that either don't require reserves or will allow your cash out to act as your reserve. Having said that, make sure you're not paying your partner out and not allowing for the reserve amount. Also, take a month or so and do what you need to do to get your score over 700. Your credit reporting agency should be able to help you with that. It could be something as small as paying off a small collection or dropping the balance on a credit card and then either waiting for a new credit cycle or doing a rapid rescore.
All the best
Stephanie
Post: No Seasoning DSCR Options?
#5 Mortgage Brokers & Lenders ContributorPosted - Washington, DC Mortgage Lender/Broker
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Quote from @Matthew Tyson:
As the title reads, I am looking for a DSCR lender with no seasoning requirement (if possible). I purchased a rental property just over 30 days ago with cash, and already have a tenant in place. Looking to pull capital out to move onto other projects I have in the pipeline. Also interested in entertaining funding for those if possible. I am familiar with delayed financing, but would like to pull more than 80% of purchase price out if possible.
• Property is located in San Antonio Texas.
• Purchased for $120k. All in around $127.5k.
• Insurance @ $860/year.
• Property Tax @ $2,950/year.
• No HOA.
• 12 month lease in place as of 10/1 @ $1,395/Month.
Thank You!
While refinancing to get cash out as soon as possible seems like the way to go, getting the best financing over the long run is smarter. If your plan is to hold the property for a long time, go with either a 30 year fixed. Wait the 3 months from purchase date and then refinance at 75% with a better long term loan.
Post: jumbo loan for investment property 4plex
#5 Mortgage Brokers & Lenders ContributorPosted - Washington, DC Mortgage Lender/Broker
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Quote from @Leland S.:
I'd like to find a direct lender as to avoid the crazy broker fee's I'm seeing of 3%. Please refer me to someone that can lend on the following:
1) Refi 1.6M. If possible, add some cash, LTV of ~50%
2) Income projected 25k/mo average (mixed long/short term)
3) LLC owned currently - but I'd be OK not doing that if that's what it takes. Credit score 780+.
4) Property is 4-plex townhomes but zoned as a single parcel.
Reality is regardless whether it's a broker or a lender, you're going to pay fees. Some will wrap it up in your rate with lender paid comp and others will make them buyer paid, but either way, no one is doing these loans for free.
If your goal is to maximize cash out, one way to not have to have the points come out of pocket is to finance them and at that loan to value, it would work.
Having said all that, 3 points is a bit much at that loan amount (unless one is a discount point). 2 is more normal for origination these days.
All the best
Stephanie
Post: Is this even possible ?
#5 Mortgage Brokers & Lenders ContributorPosted - Washington, DC Mortgage Lender/Broker
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Quote from @Juan Campos:
Quote from @Stephanie P.:
Quote from @Juan Campos:
Hello fellow investors I have another question for you all
as initially posted before, my wife and I are looking to purchase our first house hack/firs home here in the next 8 months, we are expecting a baby and are currently still saving, we are avid listeners and are very motivated to make the right moves, after reading books and listening to podcasts there are several options we have available.
However I am seeing duplexes for 300k which is out of our planned budget to start with(we dont want to be house poor) so my question is can we use the potential rent of one side of said duplex to qualify for more loan? Or would it he considered an investment property and pay 15% down payment? We have little to no dti all we own is paid off and we are looking to use fha 3.5% or conventional 5%
Most duplexes I see are 280-350 range and we are debating to either find a sfh in the outskirts of town and house hack some rooms to some siblings as we are willing to drive an hour out and make sacrifices.
Or see if we can get into a duplex with the plan to move out after a year or so onto our next door
Would the lender consider the fact that we plan to use the duplex to generate income and allow us to use the potential rent as income to qualify for more loan ?
Thanks In advance
also any investor friendly lenders or agents in the dfw area id love to network
and as the bp podcasts say let me buy you a cofee ! Thanks
House hacking is the best way to get started. Here are some things to know.
For an owner occupied, multi family property, FHA is the best way to go. You can get the highest loan to value of any of the other options. You can use up to 75% of the market rent for the second unit as income to offset the higher cost of the property. Here's a link for further clarification. https://fhalenders.com/fha-loa...
Here's a copy of the Fannie Mae eligibility matrix to show loan to value requirements for their products. https://singlefamily.fanniemae...
If you go over 2 units to 4, there is a self sustainability provision meaning the property has to cover the mortgage using 75% of the rents. That's not the case with a 2 unit property. Here's a link to a blog by FHA that explains it. https://fha.co/blog/understand...
Lots of lenders and brokers have something called overlays where their company places additional restrictions on loans to mitigate risk. Doing your research and asking questions like you are is imperative when making such an important purchase.
All the best and congratulations on your new baby.
Stephanie
That's a great "Why". If you need a lender, don't hesitate to send me a note. I know folks that work all over the country that I can refer to you.
Post: Seeking Creative Financing in Cleveland Area
#5 Mortgage Brokers & Lenders ContributorPosted - Washington, DC Mortgage Lender/Broker
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Conventional financing is the least expensive, but once you've exhausted that option, DSCR is you next best bet.
Post: I am a newbie from Maryland, and want to say hi to you all. :-)
#5 Mortgage Brokers & Lenders ContributorPosted - Washington, DC Mortgage Lender/Broker
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Quote from @Sam Bhattacharya:
I found out about BiggerPockets from Brandon Turner's book on rental investing. I thought I'd introduce myself since I've been lurking on the forums for some time.
I currently own 1 rental property in Silver Spring, Maryland. I converted the property into a rental after I lived in it for several years. I am looking to build my rental portfolio by using the stack method as described by Brandon Turner.
As I'm sure most of you know, the DC area is a rather expensive housing market. So, I am looking to invest in a more cash-flow friendly part of the country. I've been looking at Cleveland, Ohio. But I am not limited to just that area by any means.
What do you think? Let me know.
Hey Sam
Welcome to BP.
Lots of good advice here. Here's a little more. Try places that aren't Baltimore City, but the surrounding county. Go for Dundalk, Essex, Rosedale, Catonsville or even Arbutus, but go for a more landlord friendly governmental entity than in the city. Try Anne Arundel County and of course PG for deals and start attending REIA's and Meet Ups that are restarting after Covid. @Ned Carey and @Russell Brazil are both real estate veterans and really know their stuff, so take their advice and you'll be fine.
All the best
Stephanie
Post: Starting an LLC, quick question
#5 Mortgage Brokers & Lenders ContributorPosted - Washington, DC Mortgage Lender/Broker
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Quote from @Blake Beeson:
I'm about to start my first LLC for real estate investing. My fiancee owns a home in FL that we currently rent out to long-term renters. We've been renting the house since 2019 and have always had a renter in place. The home is currently in her name with her father as a co-signer. At the time she bought it she needed the assistance to show extra income for paperwork although he doesn't make any payments and would be happy for us to refi without him on the loan. Obviously, now is not a great time to refi since we currently have a great rate from years ago.
My question is; does is make sense to purchase this house with the newly created LLC or just hold on to it as is with our long-term renters in place? What would be the pros and cons? Is there anything to gain by doing this? The house currently has a good amount of equity (we owe roughly $210 and it's valued over $450) and is in a great neighborhood. We currently profit roughly $500/ month after all is said and done. I'm guessing we could allow the LLC to purchase it with seller finance but I'm having a hard time calculating how that would be beneficial to us. Any advice is welcome! Thanks in advance!
Get the fiance to refinance the Dad off title using a DSCR loan. It's a simple refinance. Cash out should be available to about 75% loan to value. Don't worry about the rate they used to have. As long as it cash flows using the new loan, take the cash out and do something with it like buy another property. No need for an LLC. She can add you to title later once you're married for $150 or not if you don't get married. NO need to "purchase" this property because she already owns it.
Post: What are you seeing for Rates?
#5 Mortgage Brokers & Lenders ContributorPosted - Washington, DC Mortgage Lender/Broker
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Quote from @Jonathan Bombaci:
Interest rates are increasing at an alarming rate and the credit markets are in a bit of turmoil right now. That being said everything in real estate is negotiable and what I have found is the bigger the loan, and the better the property, more negotiable things become. These are all term-sheets I have in my email from the last 14 days for projects that we are working on. For comparison point the FHA rates breached 7% earlier this week. I do not have a W2 job and my credit score is less than perfect (under 700). In fact I do not qualify for residental financing due to the complexity of my business so these are all commercial loans for New England based properties (CT, MA, NH)
$190,000 - Condo refinance = 6.0% for 5 years 80% LTV
$740,000 - 3 family refinance = 5.5% for 5 years 80% LTV
$4,300,000 - 40+ unit purchase = 5.1% for 5 years 80% LTV
$8,550,000 - 85+ unit purchase = 4.75% for 10 years 75% LTV + 2 years of IO
Financing has always been one of our competitive advantages and often times either makes or breaks the deals. I thing this becomes even more important in the environment we are entering into.
What are you seeing for rates / terms and where? Have you found any soft spots with lenders?
Jonathan,
I'm not seeing any rates close to what you're quoting here for a DSCR loan with an under 700 credit score.
Stephanie
Post: Refinancing a cash purchase
#5 Mortgage Brokers & Lenders ContributorPosted - Washington, DC Mortgage Lender/Broker
- Posts 4,876
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Quote from @Matt Cartwright:
@Kevin O'Brien Pretty much what Jay had mentioned - I work on the private money side where you can use the new market value of up to 75% with no seasoning and we actually don't even need tenants in the property to qualify - we will just use market rents.
If you have any questions feel free to PM me!
Matt,
What are the restrictions on the no seasoning product? 90% of the original purchase price or anything like that?
Stephanie
Post: Looking for a No Seasoning Cash-out Refi Funding
#5 Mortgage Brokers & Lenders ContributorPosted - Washington, DC Mortgage Lender/Broker
- Posts 4,876
- Votes 2,759
Quote from @Sanat Bhandari:
Hi everyone -
I bought a property last week using hard money. I anticipate the rehab to be done around mid-October and the property is already pre-leased starting in November at $1,450 per month.
The main issue is in the refinance part of BRRRR. I'm having a hard time finding lenders willing to do a 75-80 LTV cash-out refi with no seasoning period. The best that I have so far from my current lender/broker is 3 months but I'm not keen on paying hard money interest for a couple of months if I can avoid that.
Is there any broker/lender that can originate a DSCR for me by the end of October/early November with no seasoning period? I'm okay with pre-payment penalties and paying a premium on the interest rate (the best DSCR rate I have seen so far in my situation is 8.5%). The property is in Omaha, NE.
PP: $120,000
Rehab: $18,000
ARV: $195,000 (a local bank in town appraised the ARV at $193,300 recently)
I'm looking to pull out $144,000 from the investment so about 75 LTV based on the ARV.
Please reach out to me if you work with a lender (or are the lender) that can provide such an option. I appreciate your help.
~ Sanat
Hey Sanat
As others have said, you're better suited to wait the extra two months to get into a stable loan product that will amortize for 30 years to maximize cash flow. .