All Forum Posts by: Tim Johnson

1. Depending on lender, but some require a US visa so talk to them about that

2. Usually all lenders that do commercial loans- I would talk to some brokers in your area

3. They cap LTV at 60-75%, so larger down payment. They also need mortgage history, 12 months on another loan. This can be difficult to get with some- I just did one in Germany and it took 2 months to get the history from lender in Germany. US bank account and 3rd party property management.

4. The sponsor has to 100% guarantee and they normally want a Direct Deposit setup with lease monies going into US Bank

You are going to have to switch to an asset based commercial lender

yes you can do commercial loans, the rates are higher than an owner occupied loan just FYI.

You have some options but they won't be FHA or conventional loan, you will have to go Non qm.

DTI has to be below 50% with .25% rate hit, DTI below 43% no rate hit and they will allow 50% of the rental income to off set DTI, so depending on rents, taxs and insurance, you might get approved but rents, tax and insurance are the major factor to get this to work.

Lots of options for this.  I suggest you contact a local mortgage broker and tell them what you want to do.

the odds of warranty actually covering something in 10 years are very low.  If you read the warranty close, it will have an out for no coverage on just about every scenario possible.  The odds of something structural coming up after 1 year are very low.

To put it simple, they are still taking out the loan but its just in llc name. You the borrower are personally 100% responsible for the payment, the rates are even based of your credit score. All LLC loans require an operating agreement. In the operating agreement it stats who is responsible who can take out loans, what can be completed.

The fast and short story is some people think this will protect them, but when the lawyers gear up, everyone is sued and everyone will be foreclosed on if it goes south.

Talk to some local banks and do a construction loan. I'm not licensed in your state but we do them all the time. We require 10%-20% down depends on the number of units, and will lend up 75% ARV. We run them thru Flagstar bank, so find a local branch or contact the wholesale deparment and they can connect you to a broker that is licensed in the area. This is a conventional loan product so DTI and all that junk comes into play. You do have to use a licensed GC, so but the hoops to jump thru are about zero compared to an 203k loan. So much easier quicker and less paperwork compared to 203k junk.

If the rehab is light, you can also do the homestyle loan, paperwork is about 90% less than 203k hoops

This depends on the product your select.  Conventional or commercial loan and number of units-  I will use 1-4 unit size.

Products we use:

Commercial= no seasoning- rate is about point to point and half higher than typical conventional loan but they will lend 75% LTV 1-4 units They use a section 1007 market rent appraisal, so cost is about $150 higher then typical appraisal. Needs DCSR at 1% the lowest in the industry on the market in my area. Investment property only, 3 year pre payment on it. No tax returns or personal DTI comes into play. Cash out has to be used for business purposes only. Higher closing costs, but still works- Appraisal are coming in decent not many low ones. Min loan amount is 100k- 3 week close. You can close in LLC name or personal name. They do 30 year, 5/1 arm or interest only

Conventional loan- if purchased with cash- you have to wait 6 months- Anti money laundering law, actually alot of medical pot guys are doing this and getting stuck on REFI so having them go commercial. Pot is big in Michigan rate now, the money is flowing. Lowest Fees, best rate on this product. Appraisals are coming in decent, if you your doing some value add. Make sure you document it well. List of repairs nice little folder for the appraiser to document scope of work will get the value higher and LTV. Fannie Mae website is great for guidelines on this one. LTV varies on unit size. Works well 30-45 day closing, no pre payment, we set a 75k loan min. Property needs to be in personal name, all loans are full doc, so tax returns, bank statement, DTI comes into play. They do 5-30 year terms fixed only.

Just an example of my favorite 2 products on market for BRRR, lots of lenders in the market but these 2 close the easiest and quickest that I have used.

@Kevin Blanchard why would you want to do hard money?  If it needs rehab just do a rehab loan for it and then you get the low down payment and 30 year fixed rate.