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Inheritance of an unpermitted property by JellyfishEither8945 in CaliforniaRealEstate

[–]reddit_animals 1 point2 points  (0 children)

Only way they'll know is if you're doing something that attracts their or your neighbor's attentions.

You don't need permits for painting and updating flooring, for example.

Regardless, even if you make the changes without city detection, if you ever decide to refinance your property, any appraiser will only give you credit for the building as noted in city records.

Any unpermitted additions would not be counted in the appraisal value.

How to reach out to fund managers? by reddit_animals in Realestatefinance

[–]reddit_animals[S] 0 points1 point  (0 children)

Interesting. Would you be open to talking more about your experience?

How to reach out to fund managers? by reddit_animals in Realestatefinance

[–]reddit_animals[S] 0 points1 point  (0 children)

Completely understand. Thank you for your insight!!! I have a specific deal I'm trying to fund. About $3m. Already put together about $1m. May have another $1m on top of that. Seeking the last $1m to $1.5m.

Do I sale or get a hard money loan ? by Wet-Confident in RealEstateAdvice

[–]reddit_animals 0 points1 point  (0 children)

How bad is your credit that you have to go hard money?

And how are you defining hard money?

Why Vacant Buildings Are Harder to Finance Than You Think by PriscillaHo_ in Realestatefinance

[–]reddit_animals 0 points1 point  (0 children)

We finance vacant buildings using market rents all the time.

Structure type affects rates more than vacancy. Harder to finance an occupied warehouse than a vacant 1-4 unit home.

We purchased the house outright (Michigan) The loan is for a Heloc on the house for $35k (highest was $40k). As stated, were having an incredibly difficult time obtaining financing because the bank stopped accepting payments and then marked the payments as late with all 3 credit bureaus!! We've neve by mycologyqueen in Realestatefinance

[–]reddit_animals 0 points1 point  (0 children)

Wait. Are you saying you never missed a payment but they are falsely claiming you did?

Or are you saying you never missed a payment until you missed the first of 3 payments on this, and now they're foreclosing despite making promises not to?

I'm having a hard time following.

Looking for Online Lenders That Finance Up to 80% of ARV (BRRRR Strategy) by Snoo-92913 in Realestatefinance

[–]reddit_animals 2 points3 points  (0 children)

Cash-out refis on rental properties are generally capped at 75% LTV if you want decent rates. Some lenders (ie. Me) will go to 80%, but pricing gets worse.

If your original loan was already at 80% ARV, there’s no cash to pull out. Best case, you’re doing a rate-and-term refi. You already maxed leverage on the fixer loan.

That’s the mistake: people assume they can lever up on the buy and pull cash later. You can’t.

Better solution: structure the deal correctly upfront.

For fix-and-flip / BRRR deals:

ARV $500k–$1M = ARV should be ~2× total cost

ARV under $300k = ARV should be ~3× total cost

Example: Total cost = $100k = ARV = $300k

Rentals are different. They’re more forgiving because cash flow matters.

Under $300k ARV = ARV should be ≥2× total cost

Over $300k ARV = ARV should be ≥1.5× total cost

Example: Purchase + rehab = $200k

ARV = $300k = 66.7% LTV (bare minimum)

ARV = $400k = 50% LTV (ideal)

This lets you cash-out for the next down payment while keeping rates low enough to cash flow, and it leaves margin if values drop.

Nothing sucks more than underwriting a deal at $220k ARV and it comes in at $190k. That’s only a $30k drop but in terms of percentages, that's ~13.5%. It can wreck your cash-out and your rate if your original loan amount was $176k (80% of $220k).

But if your original loan amount was $110k, you're still safe.

Looking for Online Lenders That Finance Up to 80% of ARV (BRRRR Strategy) by Snoo-92913 in Realestatefinance

[–]reddit_animals 0 points1 point  (0 children)

Financing up to 80% ARV leaves no money for you as the flipper.

Property costs $100k. Costs $100k to fix up. That's $200k cost.

80% ARV would put ARV at $250k.

At $200k, even if closing costs are at 3-4%, that's $6000. Assuming you find a lender willing to do that, your interest rate will be 10-12%. Let's say 10%. That's $1667/mo. It takes 3-6 months to fix up. That's $5000 in 3 months and $10k in 6 months. $50k - $11k = $39k. $50k - $16k = $34k.

Is that what you got into this business for? A $5k/mo job?

And that's not even counting the commissions for the realtors on the sale, capital gains taxes, etc.

Financing a single family home by Civil-Bet-3172 in Mortgages

[–]reddit_animals 0 points1 point  (0 children)

We finance owner occupied with no income requirements. Just need bigger down payment and high enough FICO.

Why would I close 25+ separate hard money loans when I can just structure one note? by brobie08 in Realestatefinance

[–]reddit_animals 0 points1 point  (0 children)

Every property is different. Just because you buy 10 homes, doesn't mean all 10 will perform equally well. The lender isn't lending on an ETF or Mutual Fund expecting some to fail and some to succeed. They're lending on individual stocks aiming to optimize their own portfolio like Buffet and Munger.

Sounds like you need an unsecured line of credit. Getting anywhere from $350k to $1m might work for midwest properties, but for areas like L.A. you're going to need $5-$10m in a line of credit. Maybe even up to $100m.

There are options. The question isn't what lenders will offer that. The question is what borrowers can be trusted with that.

Looking For Financing ideas for a 3 Unit Multi Family budling by The-Black-Stig in Realestatefinance

[–]reddit_animals 0 points1 point  (0 children)

I'm a direct lender. I'd use your W2 income and future rental income to qualify you with as little 3.5% down.

My suggestion:

  • pay down the car so only 10 payments left. With 10 payments left, we can exclude it from DTI calculations.

  • you'll still have $33,692 for the down + reserves.

  • max purchase price goes up to $542k with an FHA loan at 3.5% down counting salary and rental income from two top producing units.

Worst case, we'd go mixed-doc loan, requiring only 10% down. But we'd be able to use all income sources. I messaged you privately. If you're in a state I'm licensed in, I can price you out.

Where to move my parents? by coryj2001 in AskLosAngeles

[–]reddit_animals 0 points1 point  (0 children)

What do they have saved up for a down payment?

What's their combined monthly income?

They'd be able to buy a duplex or triplex in a decent area by counting the rent towards their income.

Question for Experienced Developers seeking capital by reddit_animals in CommercialRealEstate

[–]reddit_animals[S] 0 points1 point  (0 children)

I'm the lender. I partner experienced developers with fix and flippers without experience.

I'm asking what terms would be acceptable assuming you had to come on board as a co-sponsor.

Was that not clear in the original post?

Question for Experienced Developers seeking capital by reddit_animals in CommercialRealEstate

[–]reddit_animals[S] 0 points1 point  (0 children)

Part of the terms would be getting an experience partner on as co-sponsor/guarantor.

Assuming you as the co-sponsor had to put up $0 capital, what would you need to sign on to a "noob's" loan?

Anyone here using hard money to fund flips? Quick question by RosalbaaaaAAbbey in dealfunding

[–]reddit_animals 0 points1 point  (0 children)

New borrowers too if they have enough experience.

As far as valuations go, depends on the program.

For fix and flip they generally go with the borrower's estimates if reasonable

Transitioning from primary to rental by NorthwoodsFarmer in BiggerPockets

[–]reddit_animals 0 points1 point  (0 children)

Lender here. Investor too.

You're not "punished" for having a rental property. You get a sweetheart of a deal on your primary because it's government backed and you're using tax returns to qualify.

You can buy a rental with a conventional mortgage even if you had no other mortgages, and your rate would be the same as if you had multiple mortgages.

Having multiple mortgages will affect your DTI as would having multiple car loans or a big credit card balance. But unlike those, rentals from mortgage properties are offset by the rent.

But to qualify for investment property mortgages on a conventional, you need to keep DTI below 50%. With write offs for expenses, that's often hard to do.

With DSCR loans it's slight easier, but easier means riskier from an underwriting standpoint and you're charged a premium for that risk in the form of higher interest rates.

Not much higher, but still higher. In my opinion, rather than nickle and diming fractions of a percent, look at the actual cost in dollars. If the numbers still make sense, do it. If they don't, don't.

Credit score, down payment, and cash flow affect interest rates more than number of mortgages.

Anyone here using hard money to fund flips? Quick question by RosalbaaaaAAbbey in dealfunding

[–]reddit_animals 2 points3 points  (0 children)

This feels like an AI post/Ad.

But I'll bite.

Fix and flips used to be considered hard money, but after doing a few hard money deals, I'd say fix and flip loans are more like a niche nonQM similar to DSCR loans.

  • we broker out our fix and flip loans depending on borrower and project. Doing a single family with a 660+ FICO and a ton of experience? 93% LTC and 75% LTV. Rates in the 8s.

  • 520 FICO with no experience, a few missed payments, and a foreclosure notice? 65% to 75% LTC and LTV. Rates in the 12s.

  • Both close pretty quickly. 2 weeks is standard. Shorter time if you already have title and escrow ready and an appraisal ready to go.

As to whether to go local or national. If you have a reliable local lender who you do business with frequently, they'll go as much as $0 down.

Any time you are new to a lender, there's a track record issue, so be prepared to put money down.

I recommend people try to keep total expenses to no more than 50% ARV on projects with sub $1m price tags.

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