All Forum Posts by: Timothy Hero
Timothy Hero has started 25 posts and replied 983 times.
Post: Real Estate Play Near Mega Infrastructure Project. Need Your Take.
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I think that's a smart strategy to be honest. It's creative. But what about when construction is complete? Is there market/audience in the area to keep it as a STR?
Post: 5 unit DSCR lenders
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I know of some, but the market is a little more stricter right now on 5+.
Post: DSCR (<5 unit) interest rates versus commercial rates
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5+ unit deals are a little tough right now. I broker any number of units in the private side, but there's a reason I'm not really marketing 5+ unit DSCR.
I know of 3 lenders that are financing them right now, and one just put a pause on them unless they are in a portfolio of 1-4 units.
Another lenders rates are so high I don't even send them deals to price anymore. Regardless of credit, it seems 8.25% is their go-to rate.
I have one lender, who I'm currently doing a 30-unit with right now. That lender is typically 75% LTV, cash-out, at around 7.6%. A little higher than the 1-4 unit space, but still manageable.
Post: Help! DSCR loan/trouble showing Airbnb profits to underwriting
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Financing STR's in this market is a little trickier. I know of an STR lender that goes off your Airbnb history, and if you don't have a full 12 months of that, they'll look at comps via Airdna, then go off 80% of those numbers.
Post: Question, fix and flip loan or DSCR
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If it needs rehab, then it won't qualify for a DSCR and you'll have to go the fix and flip route. DSCR is for rent ready properties only, as the cash flow is the approving factor.
Post: Looking to obtain a DSCR Loan
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I have STR lenders that'll go off the higher score borrower between you and your wife, but, a 700 score and $9k rent on a $1.7M property will not yield cash flow enough for 80%. 75% LTV is even questionable to be honest.
Post: Current DSCR rates
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Not sure if you're still asking, but my lowest rate guys are quoting 6.9 - 7.2% for the best credit borrowers. Avg credit (700-739), expect around 7.5%.
Post: When to Refinance
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Refi the rental, keep the rate on the primary.
You can maybe get 20-35 bps lower on the primary, but not worth it, unless you're talking a $750k+ mortgage.
Like mentioned above, rental loans right now are low 7's for 75% LTV. I know of a lender doing it at 6.8% with no buy down if your credit is good.
Post: Commercial 5-year ARM's - Please tell me there is a better way!
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Quote from @Kevin Jo:
My opinion is these are not good investments. $19k potential profit on 4 houses if nothing goes wrong?? One multi family should net more or the same with less headaches. You have cash to get into something safer with better upside and better financing options which will help mitigate risk.
Post: Hard Money Project
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How much are you willing to put down? As pointed out by almost every comment, the space is in pretty close competition right now; 10-15% down with 100% of rehab funded on a draw process.
The difference with lenders for these fix and flip deals isn't usually the LTV, but the length of the loan, the rate, and closing costs.
One may offer 90% of the purchase price, but require 3% origination. So it's really 87%.