All Forum Posts by: Steven Goldman

You are clearly a DSCR candidate. You will have to adjust your numbers going forward to account for the higher interest rates on a non- QM product. You still have many options just not the conventional traditional banking path. Good luck!

Good afternoon, I would rent them and then sell turn key, if you can still get a good return on the properties. 

Hi Jason: Almost all lenders will require a tenant prior to refinance. The lender will use the lessor of the actual rent as reflected by the lease or the appraisers determination of average rent for the property. So lease is $1450.00 projected rent from appraiser $1250.00 rent used $1250.00. This is important to understand because all lenders will do a debt service calculation to determine the maximum refinance amount for the property. Lenders use between 1.0 (funding companies) and 1.25 or above banks and others. They also reduce the income for possible repairs and vacancies some use 5 percent.

You should understand the max. out refinance based on rental prior to acquiring and committing to the rehab. It allows you to understand how much you will be able to draw out above the loan for the purchase and rehab.(Unless you are fortunate enough to working with cash) We advise our team mates to understand the math completely before committing to a project. Good luck.

Unfortunately, you purchased the lot and now are only looking for a construction loan. This severally limits your options.  If you do not have adequate cash reserves you are going to find it tough sledding to get a construction loan. Obviously, the potential economic downturn makes STRS much riskier. You will need six-12 months of reserves or adequate personal income to get a funding company to look at you. Good luck.

The problem with parking lots is you need cash to buy them. Few lender's will finance them. If you can find financing it is at a low LTV. Good luck.

Hi Amir:  In my experience it is important to develop a relationship with your banking or financing relationship. I would definitely speak with your bank about your real estate goals and see how they can help you. If your goals is to create operating capital to acquire additional properties, you should let them know that.

If your current mortgage is advantageous, I would be reluctant to refinance it. Rates are rising and the refinance could be at a higher interest rate. Maybe, your lender can give you a business line of credit, allowing you to have the capital you need without refinancing your existing mortgage. If you are going to refinance your existing mortgage than banks and credit unions will have the most competitive rates. Some of the funding companies who are comfortable in the multi unit greater than 8 space will be competitive. But they are likely to be at least 2 percent over the banks rate. Banks usually will not be fixed rates and will not extend past a 20 or 25 year amortization. Where some funding companies will go 30 years fixed on small cap commercial. 

I have always ascribed to the idea that you should have a relationship with independent mortgage broker who is familiar with all of your options and can consult with you on your goals and help achieve them. Good luck.

I suggest that you develop a relationship with a broker or lender who can advise you on the financing aspects of your scenarios. Throughout my real estate career I have always developed friendships with my core 4/5 or 6.  You should be able to call your financing advisor and get a honest opinion about your deal. Your entire project has to work. You need to know the approximate  numbers before you go under contract. Your financing relationship should be willing to analyze your deals quickly and regardless of the time of day or night. A good deal waits for no investor. When we are investing in Ohio we have an entire team including legal who can assist us in analyzing the transaction.  

In establishing your relationships you should find investigate if the agent, insurance agent, property manager, broker, lender or lawyer have actually been investors and really understand what you need. Their is no substitute for actual hands on experience. Good luck, real estate what a rush!

No disrespect meant for Dayton. I agree with Michael and Austin. These are emerging excellent markets. They are especially attractive to less seasoned investors because of the low entry bar. Here is a reprint of rent o meters Dayton and other cities average rent 3 bedroom SFH. Good luck.

Summary

This report highlights the average rent for three-bedroom (3-BR) single-family rentals (SFR) in five select Ohio cities from Q1 2021-2022: Cincinnati, Cleveland, Columbus, Dayton, and Toledo.

Methodology

Geography: The scope of this analysis is five cities in the state of Ohio.

Property Type: Three-bedroom (3-BR) SFR with all bathroom counts.

Analysis: The data collected shows year-over-year change in average rent from Q1 2021 to Q1 2022.

Data: Includes data collected and updated between January 1st and March 31st for 2021 and 2022.

Jonathan: No one in the D.S.C.R. space will give you 100 percent financing. The ratio has nothing to do with it. All lenders require some skin in the game or, government insurance. In fact, at the moment lenders are tightening their guidelines. Some commercial banks are at 70 percent LTV on more risky collateral. (i.e. office buildings, restaurants etc.) If you do not want to contribute your own capital, you can find a JV partner and give up some of your equity position, for the down payment. Good luck.

This is good advice. The key is to know which lender concentrates on the type of product you are looking for. It also depends on the type of collateral you are purchasing. Everyone has a niche and so a 1-4 might go somewhere different than a mixed use or retail. The banks are always the best if you can stand the hassle, have the necessary reserves, and DTI. Most bank are 5-20 or 10-20. Only a few are 30 fixed. Good luck.