All Forum Posts by: Tyler Warrick

 Would you be opposed to moving the money around? Just trying to get creative here.

$308k purchase, ideally 15% down, with rehab budget of $112k (ARLTV at 75%).

This way you put $46,200 down plus closing costs on the HML.

Then you're DSCR RT refinancing at 74% LTV (better pricing, and gives you the extra cash to work on the rehab, just not financed through the HML).

Thoughts?

Hey @Hemanth Grandhige! First off, congrats on the portfolio you've built; seems like you've bought correctly.

When structuring cash out refinances, you'll always get the best rates if your LTVs are 60% or less. Pair that with a great credit score and you'll see rates in the mid to high 6's (assuming DSCR loans). The higher the leverage, the higher the rate.

I'm glad to hear you'll be shopping around. Brokers are definitely the way to go as they have access to wholesale rates and a vast program selection. That being said, lenders in general can only control the lender fees (if working with a broker, their origination fee). Brokers can charge between 0 and 2.75 points of the loan amount. I'd say standard for most brokers is 2 points on these types of loans. Myself, I charge 1.5 for new clients to stay competitive and typically work with my clients on repeat business.

Hope this helps!

Great question! There are three main types of residential financing out there.

Agency loans: Conventional, FHA, VA and USDA

NonQM loans: DSCR, 1099, Bank Statement, P&L, Asset utilization etc

HML/PML: Bridge, fix/flip

Most investors who are looking to do value add go with a HML/PML as the lender only cares if the deal makes sense (Is there ample equity in the deal if the investor cannot complete the project, will the value be supported after the project is complete). These types of loans are available to simply acquire the property and are short term in nature (6-24 months). If an investors wants to flip, they sell. If an investor wants to hold, they refinance into one of the other types of loans.

Hope this helps!

It would be seen as a rate and term transaction, and your client would have to pay lender fees, third party fees and escrows. However all of these fees would be able to be rolled into the loan. 

If you google, "how much are closing costs" you'll get a result from Rocket Mortgage (most expensive lender) stating the fees could range from 3-6% of the property's value. 

If your client has good credit, I would assume this would be closer to the 2-3% range in NY.

I have a lender who can waive up front lender points by taking a higher rate. This is usually the option my clients go when they know they'll be out of the HML in 6 months or less as it reduces their cash to close up front. You'll be seen as an experienced investor with your 5 exits (assuming they've been completed within the last 36 months).

I'm in San Angelo, TX so about 4 hours away from Dallas. However, I'm confused on your $68k out of pocket request and $100k out of pocket request. Can you please clarify this?

@Ray Hage might be a great resource to connect with. He does this in FL market and might be able to give you tips/tricks.

 This is disappointing to see that your first experience in the forums was negative. It shouldn't be that way, and your feelings are valid. I wish there were moderators in these forums.

 Ahh the dreaded question for a loan officer! Transparently speaking, yes, most builders lenders will offer insane incentives. For reference, I purchased a new build in 11/2023 (to give you perspective). However there are always things to watch out for: Builders cannot build quick enough now (demand is too high), so a lot of them cut corners; if you have a highly skilled agent they can go to bat for you/keep an eye on the builder as you are out of state. But on the positive side, no lender in the country can compete when the builder offers a 20-30k seller credit just for using their lender.

Now, I'm sure you're a smart fellow and understand the addage, "there's no such thing as a free lunch." This holds true in these new build scenarios. The builder typically owns the mortgage company (51/49 percent split) as well as the title company. So they are triple dipping in profit on your deal -- they typically bake in the incentive (whether it's a $5k incentive or a $30k incentive) into the sales price. But again, even I went with a new build as there are always pros and cons.

That being said, some of my clients go with the existing build route, as they know the previous owners typically have already made the necessary repairs/updates that the builder skipped out on. 

Hope this perspective helps!

 Happy to help! Best of luck, my friend. 

I would 100% run these questions through your RE Attorney, but if you're looking to be best protected I would venture to say one property per trust/LLC (however your RE Attorney might suggest this is overkill).

 Totally! Lenders are great, but at the end of the day we gotta stay in our lane. A lot of my business comes from Financial Advisors because I understand that principal and a tool in their tool belt.