All Forum Posts by: Andres Saias

Hi Justin,

Thanks for your question. It's a good one, and there are a few factors to consider when deciding whether to rehab or rebuild a property.

The condition of the property. If the property is in poor condition, it may be more cost-effective to demolish and rebuild. This is especially true if the property has structural damage, mold, or other major problems.

The location of the property. The location of the property can also play a role in the decision. If the property is in a desirable area, it may be more profitable to rehab it. This is because there is a higher demand for homes in desirable areas, so you can charge more for rent or sale.

Your budget. Of course, your budget will also be a factor in the decision. If you don't have a lot of money to invest, you may be better off rehabbing a property. This is because rehabbing is typically less expensive than rebuilding.

Once you've considered all of these factors, you can make an informed decision about whether to rehab or rebuild a property.

Here are some additional tips for making the decision:

• Get a professional inspection. A professional inspection can help you identify any major problems with the property. This will give you a better idea of the cost of repairs and whether it's more cost-effective to rehab or rebuild.
• Talk to a contractor. A contractor can give you an estimate of the cost of rehabbing or rebuilding the property. This will help you make a more informed decision about which option is best for you.
• Consider the resale value. When you're deciding whether to rehab or rebuild, it's important to consider the resale value of the property. In general, rehabbed properties tend to sell for more than rebuilt properties. This is because rehabbed properties are often in better condition and have more character.

Ultimately, the decision of whether to rehab or rebuild a property is a personal one. There is no right or wrong answer, and the best decision for you will depend on your individual circumstances.

I hope this helps!

Hello William, 

If you need a DSCR Loan, I recommend you use the find a lender tool on bigger pockets, and you can contact several private lenders directly.

Depends on what you need. Hard money lenders or private lenders are a good option, they're fast and flexible when it comes to loan approval. However, they do have higher rates. 

Hello,

Every lender has different guidelines for loan approval, they will take a look at property location, previous experience ( not required but it does affect the deal), credit score, loan amount, and liquidity. Some lenders will ask for appraisal others will do an in-house valuation. They will also ask you for a down payment somewhere in the range of 15%-30%.

Hello Lyn,

It depends on your needs and the project. Hard money is an option. You can apply for a new construction loan. This type of loan has its pros and cons but everything does. These loans are usually Dutch, have no prepayment penalty, last 12-24 months, and are interest only.  The requirements for approval are more flexible, but if you have no previous experience the LTC will be lower. The con is that the rates are higher than a regular loan and lenders will likely not approve of the loan if it's not for investment purposes, by these I mean your intention must be to sell or rent the property once finished, not live in it. 

I do not recommend a land loan if you intend to construct, it has higher rates than a construction loan and you get less LTV on the loan

Hello Linda, 

Finding 100% financing is difficult. Most lenders will require 15%-20% on your part. You also have to take into consideration the closing costs. However, if you're not experienced in fix and flips, lenders will probably ask for a higher down payment. Factors such as credit score and  property location might also affect the deal. 

Hello,

It depends on what you need. If you intend to rehab the property, your best option is to get an HML short-term loan that includes a percentage of the purchase price and 100% rehab costs, interest-only payments, and no prepayment penalty. After the property is renovated and rented, refinance to a DSCR Loan. The new renovations will make the appraisal for the property higher, this will give you the option to get more money for the loan. Renting the property will make it easier to get the loan approved because the lender won't need to rely on an estimate of how much the rent would be. Having done both, you can ask for good terms when negotiating the refinance. Take into consideration that some HMLs offer both types of loans when looking for a lender.

However, if the property is ready to rent, you do not need an HML loan, you can just apply for the DSCR Loan.

It looks like you had a rough first time with hard money lenders. Every lender has its pros and cons. My recommendation is to shop around and ask all the right questions. Don't just ask for the rates and closing costs; ask questions about the process, options for extension periods, how the company operates, etc. If you feel a lender isn't transparent or your instincts tell you something is off about the deal, look for another lender.

Use local lenders that know your market. Another option is to use an experienced broker, this will make your closing costs a little higher (they charge commissions), but they know the industry very well and can help you get what you need.

You should also take into consideration that guidelines change and problems come up, however, a good lender should be transparent and offer possible solutions, and if there aren't any, be truthful and apologize for the inconvenience.

You should use a lender you feel comfortable with and don't limit yourself to one lender. Get pre-approved with several lenders to see which offers you the best terms. If a lender starts to change the deal at the last minute it's good to have a fallback plan. 

You can make an offer on your own, my company funds in NY if you're interested. I can also refer you to another lender or broker. Brokers are great when it's tricky for you to get a loan but if it's an easy loan there's no need and you'll pay less for the origination fee( the broker usually charges a commission through the lender). You can DM me for more information.