All Forum Posts by: Steven Goldman

In the current environment if you have funds you may win the day during the contract battle by not having a mortgage contingency in your agreement. When you pay cash for the property you must be aware of the cash-out refinance issues. First, on a cash out refinance, you are going to be limited to 75 to 80 percent. Also, you will not be able to use the increased value which may appear as a result of your excellent negotiating skills. What I mean is this: If you get a deal by buying in cash and it is under market value, you will not be able to refinance above your purchase price for one year unless you make significant improvements to the property. Cash works for a rehab and BRRR not so good for a buy and hold if you wan to get your cash out quickly. So your operating capital may be tied up for a period of time. If you are relying on a cash out refinance as your exit strategy than you need to talk to your lending source to make sure you can get your capital out without disrupting your real estate acquisition schedule. Good luck and happy hunting. Real estate investing is great!

We are brokers for Constructive mortgage and ten other purchase and refi. lenders. We also produce fix and flip and fix and hold mortgages.We have had only good experiences with Constructive. Yes you pay points. However we have closed numerous loans with them and they have always been responsive. They are willing to write difficult loans such as lower credit scores, 1.0 DSCR, foreign nationals, non permanent resident aliens, more than four unit properties, . Like all lenders, lower credit scores will cause you a rate hit. As will, small mortgages, or marginal debt service coverage. We are often able to turn a loan in under 30 business days, but not always.

Constructive offers thirty year fixed financing most conventional lenders will not. They are 5-20 or 5-25. This produces a risk if rates go up as is being predicted.If you have excellent credit, and a conforming deal, with plenty of time to close,than a bank is always the best choice from a rate and fees perspective. As long as you are willing to take some risk on the interest becoming adjustable after the 5th year. Good luck going forward on all of your deals. If its easy deal or a hard deal we get it done!

We provide hard money financing in Ohio. We have completed deals in Akron, Canton, Columbus and  Cleveland. Fix and Flip, BRR refis' and cash out. Quick turn times  Columbus is a happening market. Pricing on shells is rising, rates are reasonable and there is no time like now to get started.

Good Morning Chiwei I hope you have already acquired your first Philly property if you have not I have some suggestions. First, do not limit your search to Philadelphia County. Delaware, Montgomery and Bucks Counties expand your opportunities. Second search the popular social sites for pages which wholesalers or owners are advertising their opportunities. Such as: Pa Off market Properties or soothing like that. This will give you a chance to purchase properties which never make the MLS. Good Luck!

Wow, we have numerous lenders that will refinance properties which have been rehabbed without a one year seasoning requirement.  If you are purchasing the property in a distressed condition the issue of seasoning should not be an impediment to a cash out, or bridge to permanent transaction. 

The lenders we use have about a 30 to 45 calendar day process. The costs might range from 1to 2k. plus our fee. Unless you have really poor credit funding is much easier these days than it used to be. Lenders will base your permanent loan on debt service coverage and many will not look at your DTI and other personal finances except to collect the information for compliance purposes. We place vacation rentals and many other properties which have been recently renovated and purchased at distressed prices. It is harder to find a good deal, than to find the money to do it!

In the Philly area the competition for properties is stiff. Surfing the MLS will not get you where you want to go. I strongly suggest looking for bargain property or distressed property Facebook groups

https://www.facebook.com/group...

Wholesalers have been marketing their properties at those sites without incurring commissions or costs. I have rehabbed commercial and residential properties. In this type of environment you will have to buy uninhabitable properties and do more of a full gut rehab. This can be challenging as underestimating a more complete rehab. is one of the most common errors I have observed in my 40 years of real estate. So make sure the your cost of repair, or rehab, is accurate. Have a fully developed scope of work for your project so the contractor can not hit your with hidden additions or change orders. If you are going to be your own GC, be realistic about how much time and effort it will require. If you are buying outside of your area make sure to budget your travel cost or a consultants, because if you, or your representative do not visit your project, it will go poorly. (Your contractor is not your friend or representative, he is in business and you must keep that in mind at all times as you move forward in your real estate career.)  A full gut rehab. should yield you a minimum of 30 to 40k or it is not worth doing.

I love real estate. It is very satisfying to restore old buildings.

The Philadelphia market is extremely hot. We fund rehab. bridge loans as well as the cash out refinance piece. Before, you buy a rehab. property in Philadelphia be certain that it works on debt service coverage for the refinance. Be aware the Philadelphia's neighborhoods can be tricky. We work with Keller Williams Philly Team Live Love Artemus and they are thoroughly familiar with the inner city neighborhoods. A few blocks either way makes a huge difference. Try Jennifer Paullin at 215-783-4433. She is a very active distressed property and estate agent who has the resources and experience to aid your long distance search. Good Luck!

You will not have a seasoning issue with a property you purchased with a HELOC. The issue will be how much you can pull out of the property, not when. If you made valuable improvements than you will be able to cash out refi up to 70 percent of the ARV. If you did not then the cash out will be based on your purchase price unless a higher figure can be justified by some event. Post Covid, banks and funding companies have significantly tightened their guidelines lowered their LTVs and increased the D.S.C. ratios. Good luck!

In the pandemic environment I know of no lender who will lend on a disclosed investment property at 10 percent down. I hope they are right about Hope. On the other hand the advice to buy every 18 months, hack and move leaving a tenant behind, is a good strategy, if you can not raise the down payment.  Eventually, you will build up your D.T.I. and global D.S.C. to the point that you will not be able to employ that strategy.  

We have found that finding a money partner may be your best bet. You do the leg work and they provide the capital. Good luck and keep pushing.

At the moment cash out refinancing is very challenging. Many banks and funding companies are limiting loan to value cash out refinancing to 55  percent to 70 percent L.T.V. This is particularly true if you have a number of investment properties. Funding companies and banks are concerned that the cash out will not be used for business purposes and that the investor will not have enough skin in the game if things get tougher.

If you qualify for government or agency financing that's great, but many of our investors do not and they rely on small banks and funding companies. You can expect to see lenders tightening debt service  calculations. Prior to the pandemic d.s.c. was 1.0 since the pandemic it is 1.2 or greater. Some lending institutions have their own special debt service formulas. In many cases the acceptable minimum credit score has increased substantially. You should be sure your broker, or loan originator, knows the details for each of these programs. The funding companies have increased fees and costs and in some cases are escrowing payments to insure against default. 

I recommend that you obtain at least three quotes from different lenders to be able to compare them. They are not always apples to apples, so a qualified and experienced broker, can sift through the many options and present you with the best three. For instance we have 25 lenders that we deal with in the states we do business. This allows us to present a range of options to investors. 

Frankly, we do not recommend that you use your own money to do your deals. It is easier to obtain financing for the purchase of a tenant occupied property than it is to cash out in the current environment. If you are BRRRing then be sure you have a pre-planned bridge loan exit strategy and know the costs of the exit strategy, before you sign the contract.  Expect to leave more of your money in the deal then you did before the pandemic. Good planning insures good luck!