All Forum Posts by: Steven Goldman

 Usually it's five. Than you are ready for Non-QM funding. 

@Edna Salinas

I am a Philadelphia Broker. Most credit unions do not play in the DSCR space. Some banks do. I would never pay a broker for access to a DSCR loan. Depending on the size of the loan some banks are offering 5.99 but the loan is a 10 year fixed 20 year term. The P&I payment is similar to the current 30 year fixed HML lender payment. Lower interest, shorter term, same payment. You will have trouble identifying these banks on the internet because their sites do not always make it clear they are a DSCR lender. Keep in mind the bank will still calculate your DTI and want a 700 plus credit score with 6 months reserves in the bank. Good luck.

@Christian Requejo                

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.

Hi Martene: Fix and hold financing is readily available if you have a qualifying credit score and the deal makes sense. You can expect a HML to provide 75 to 90 percent of the purchase price and 100 percent of the scope of work, not to exceed 70 percent of the ARV. (Determined by your level of experience and credit score) Rates are 8.99 to 12.99 and points. The cash out refinance will be at 75 percent of the after repair value so long as the rent covers the principal interest taxes and insurance by 1.0 or better. Currently Investor cash out rates are at 5.99 for a 10-20 at the bank or 30 years fixed at 7 to 8 if you use a HML.

I suggest you always run your proposed deal by a broker or lender with experience in this are to insure the deal makes sense and you can exit with all or, most of your money. Good luck.

@Neil Seldomridge

Hi Neil: Please do not take this the wrong way, but I think that is far too tight a spread to BRRRR on. Why are you limiting yourself to your HELOC limit. You could use some of your HELOC funds as a down payment and than borrow from a fix and flip lender. That would allow you to scale up and thus have a bigger spread. I think a property around 115k purchase 80-100 rehab and 290 ARV is a better target even for a newbie. Depending on how you manage the project, you will walk away from closing with 25-40 k. If you play down at the bottom you are going to find that a lot of work will result in a little profit. It is the same amount of work to do a slightly larger deal with a much greater return. Just saying.

Zac I totally agree with Sheila Roberts some of the best opportunities are to be found in the foreclosure process. You may be aware that many of the websites that are advertising foreclosures are controlled by the lenders and require bidding. Bidding is the death of the real estate bargain. Many Counties have their civil records on line. So depending on where yo are looking you can look up the foreclosure filings in judicial states or the Notice of defaults in non judicial states. In the judicial States you will be able to see the foreclosures almost in real time and you can door hang, write or email those homeowners. It is a methodology which requires dedication and persistence. I found most of the great deals I wholesaled or rehabbed from the foreclosure filings. You must reach the homeowner at the beginning of the process otherwise they are inundated with short sale and loan modification advertising and you will miss the window. My letters often arrive before the Sheriff service. It tales patience as many of these homeowners want to stay in the house for as long as they can. The key is to tie it up early. Of course the meet ups are also a great place to get information as is  BiggerPockets! (Gratuitous advertising, LOL)

Hi Marseille as long as you have passed the seasoning requirements for a FHA/VA than you can rent the property out without fear of a current mortgage default. On the other hand if you want to take cash out you could refinance or HELOC the property while you are still living there and than rent it out. A cash out refinance would be better as owner occupied as an investor cash out will require the property be occupied at the time of application with proof of a written lease. Either way you have numerous options. I wish you well on your real estate journey. May the wind be at your back!!!!

Alex you need enough money to put down a down payment. Most of our wholesalers are wholesaling because they do not have enough funds to flip. So, that is absolutely untrue. Wholesaling is a matter of finding a homeowner who wants to sell and developing a relationship with them so they trust you. In this business when you have a relationship for closing deals you will find business whether you are a agent, lender, broker or wholesaler. Good luck.