All Forum Posts by: Tyrell Proby

 Thank you so much!

Hi everyone — my friend is trying to close on a townhouse here in Arizona using a conventional loan, but is having trouble. Her current lender won't move forward because the HOA isn't answering a few specific questions — mainly ones related to structural integrity and reserve funding.

From what I understand, this has become more common since that building collapse in Surfside, Florida back in 2021. Ever since then, lenders have been cautious with condos and townhouses, requiring detailed questionnaires from HOAs. The problem is, her HOA is refusing to answer certain questions — and now her loan is being held up.

I’m looking for a lender who has experience with this situation or can work around it. If you know someone who might be able to help, please message me or drop their info in the comments. I’d really appreciate it!

Hey Bernard, 

More than happy to connect with you! I've done multiple loans in Wisconsin. I sent you a PM, get back to me whenever you can! 

When financing your flips, do you focus more on getting the lowest interest rate or avoiding upfront points?

I recently spoke with an investor who takes a 6-month loan at 16% interest with no points because he consistently flips in 3 months or less. Even though the rate is higher, he avoids the 2 points ($4,000 on a $200K loan) that come with lower-rate loans.

By closing out the loan early, he only pays $8,000 in interest versus a lower-rate loan at 10% with 2 points, which would cost him $9,000 total ($5,000 interest + $4,000 points). For those who turn projects fast, does a higher rate with no points make more sense for your deals? Or do you still go for the lowest rate possible?

Let me know what you think.

Who are your favorite lenders and property managers in the Scottsdale area?? 

Real Estate Meetups, who goes to them?? We all should! I want to find some more, can anyone tell me the best way to find these meetups or do you just use the Meetup website like everyone else?

If you're venturing into the world of fix and flip projects, there's one crucial aspect that can make or break your success: the exit strategy. Having a solid plan for loan repayment is just as important as securing funding in the first place. In this post, we'll dive into the significance of exit strategies and explore various options to help you choose the most suitable path for your fix and flip project.

1. Understanding the Significance of Exit Strategies:
   • a) Why is having an exit strategy important?
     • Mitigating risks and maximizing returns: The benefits of proper planning.
     • Builds credibility with lenders and potential partners.
2. Exploring Different Exit Strategies: 
3.       a)Selling the Property:
   • Assessing market conditions and timing your sale for optimal returns.
   • Identifying target buyers and marketing strategies to attract them.
   • The importance of accurate property valuation to determine a competitive listing price.
   • b) Refinancing:
   • When does refinancing make sense for a fix and flip project?
   • Evaluating interest rates, loan terms, and potential cash-out options.
   • How to leverage refinancing to access additional funds for future investments.
   • c) Converting to a Rental Property:
   • Transitioning from fix and flip to buy and hold strategy.
   • Conducting rental market analysis and estimating cash flow potential.
   • Planning for Refinance. 
4. Choosing the Most Suitable Exit Strategy:
   • Assessing project-specific factors:
     • Property location, market trends, and demand.
     • Projected renovation costs and potential ARV.
     • Holding costs and time constraints.
   • Evaluating personal goals and risk tolerance:
     • Short-term profit vs. long-term income generation.
     • Balancing risk and reward based on individual circumstances.
     • Aligning the chosen exit strategy with your overall investment portfolio.

Remember, each fix and flip project is unique, and there's no one-size-fits-all approach to exit strategies. It's crucial to thoroughly analyze the market, property specifics, and your personal goals before making a decision. Taking the time to plan your loan repayment strategy can significantly impact your profitability and pave the way for future success in the real estate investing realm.

I'm excited to hear your thoughts and experiences with exit strategies in fix and flip projects. Please share your insights, ask questions, and let's continue the discussion on this critical topic.

Here are some key factors that most Lenders consider when evaluating a DSCR Loan Application:

Property Income: Your rental property should generate enough income to cover all the expenses, including the loan payment. Think of it like feeding a big family with one paycheck - you need to make sure everyone's needs are met.

Property Expenses: Lenders want to make sure you're not spending more money than you're making. They'll look at your expenses such as property taxes, insurance, maintenance, and vacancy rates to ensure you have enough money left over to cover the loan payment.

Borrower Experience: Lenders want to know if you have experience managing rental properties, so they'll look at your past history to see if you have a track record of success. It's like a job interview - they want to know if you have the skills to succeed.

Credit Score: Your credit score is like your financial report card, and lenders want to see a good one. A high credit score tells them that you're responsible with your finances and have a history of paying your debts on time.

Property Location: Lenders may also consider the location of the property to assess its potential value and risk. They'll want to know if the area has a strong rental market and if there are any potential hazards that may affect the property's value or income potential.

Overall ;) - make sure your property is bringing home the bacon, your expenses aren't too high, you're an experienced landlord, your credit score is top-notch, and your property is in a great location. Easy, right?

A DSCR (Debt Service Coverage Ratio) loan is a type of loan that's given to real estate investors who want to buy an income-generating property, like an apartment complex or a Trap House. The lender calculates the DSCR by dividing the property's net operating income (the income generated after deducting expenses) by the total amount of debt payments due on the property each year. The higher the DSCR, the better, because it means that the property generates enough income to cover its debt payments.

...imagine that you want to buy a pet dinosaur to rent out to tourists for rides. The bank is skeptical of your business plan, but you're convinced that it will be a huge success. You apply for a DSCR loan, but the bank is concerned that you won't be able to generate enough income to cover your loan payments. So they calculate your DSCR by dividing your projected dinosaur ride profits by your loan payments. If your DSCR is 1.25 or higher, they might just approve your loan. Who knows, might work.

 I second that!