BRRR Archives - Commercial Mortgage

January 10, 2024

Published by Bryan Hanley at January 10, 2024

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DSCR Loan FAQs

Why does a DSCR lender need an operating agreement for my LLC if its not required by the state? This question comes up at least half the time in DSCR loans. Often, DSCR lenders will not close unless there is an operating agreement in the borrower’s file. The reason for this is that the borrower on the loan technically is the LLC. The person behind the LLC is the sponsor, or guarantor. The lender wants to know who legally has right to the property through the LLC. One of the jobs of the operating agreement is to outline who owns the LLC and what percentage they own. Typically any sponsor who owns 20-25% or more of the LLC would be required to be a signer on the loan as well. If you need a mortgage and need help with this, […]

September 13, 2023

Published by Bryan Hanley at September 13, 2023

5 Super Effective, Killer, Unique Ways Real Estate Investors Find Deals

Real estate investment is a dynamic and lucrative field that offers numerous opportunities for investors to grow their wealth. However, finding the right deals is often the most challenging aspect of real estate investment. While traditional methods such as working with real estate agents or scouring online listings can be effective, seasoned investors often employ more innovative and unique strategies to discover hidden gems. In this article, we will explore five super effective, killer, and unique ways real estate investors find deals. Driving for Dollars One of the most unconventional yet highly effective methods used by real estate investors is “Driving for Dollars.” This technique involves physically driving through neighborhoods, particularly those with high potential for investment, and scouting properties that appear distressed or neglected. This hands-on approach allows investors to identify opportunities that may not be listed on the […]

May 5, 2023

Published by Bryan Hanley at May 5, 2023

What is Freddie Mac Small Balance? (For multifamily 5+ unit properties)

Freddie Mac Small Balance is a lending program offered by Freddie Mac, a government-sponsored enterprise (GSE) that provides liquidity and stability to the U.S. housing market. The Small Balance program is designed to provide financing for smaller, multifamily properties with 5 to 50 units. These properties are typically owned by individuals or small businesses and are often located in less urban areas. The program offers competitive interest rates, fixed or floating-rate loan options, and flexible loan terms to eligible borrowers. It also includes streamlined underwriting and financing processes, which can make it easier for borrowers to obtain financing for their properties. Overall, Freddie Mac’s Small Balance program provides an important source of financing for small multifamily property owners, helping to support the availability of affordable rental housing in the United States. The maximum loan amount that can be borrowed through […]

April 25, 2023

Published by Bryan Hanley at April 25, 2023

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How to Calculate DSCR: A Simple Guide for the Savvy-ish Investor

Are you a real estate investor who’s a bit confused about what DSCR is and how to calculate it? Don’t worry, you’re not alone. DSCR (Debt Service Coverage Ratio) can seem like a complicated financial metric that only the most mathematically gifted investors can understand. But fear not! With a little bit of humor and a lot of patience, we’re going to break it down for you. First things first, let’s define what DSCR actually is. In simple terms, DSCR measures a property’s ability to generate enough income to cover its debt obligations. Essentially, it’s a way to determine if a property is generating enough cash flow to pay its mortgage and other debt obligations. This ratio is important for lenders to assess a borrower’s ability to repay a loan, and for investors to assess the profitability of a potential […]

October 6, 2022

Published by Bryan Hanley at October 6, 2022

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Best way to get a Mortgage for Investment Properties over $2,000,000

The most country considers a two-million dollar property to be expensive, and it is. Obviously, the housing market is robust and will most likely remain so for some time. In light of this, purchasing a home for $2,000,000 or more is sensible if you have the means. And besides, price and rent increases are certain to continue due to inflation. Generally, you shouldn’t spend more than three times your annual gross income on a property. Helping people make responsible purchases is a component of the 30/30/3 rule for acquiring a property. Consequently, you must earn a minimum of $667,000 annually to purchase a $2 million home. You should also have sufficient money for a 20% down payment, or $400,000, and an additional $100,000 in cash reserves just in case of any unforeseen event. With the current cheap mortgage rates, you can […]

October 5, 2022

Published by Bryan Hanley at October 5, 2022

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How to Cash-out Refinance Investment on Your Property: A Step-by-step Guide

Real property is known to be a good investment because historically, its prices are on the up and up. When value appreciates, so does the profit of real estate investors. With that in mind, real property investors should always be on the lookout for ways to expand their real estate portfolio. Cash-out refinancing is one way to do that. What is Cash-out Refinancing? Cash-out refinancing is the process of taking out another mortgage to “finance again” the property. With a refinancing, you can convert your home equity into cash, which can then be used for various things. Since we are talking about property investments, then that cash can be used as a down payment for another property, hence expanding your real estate portfolio. When you apply for a new mortgage, it has to be larger than the balance of the […]

October 5, 2022

Published by Bryan Hanley at October 5, 2022

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Rental Property Mortgage Rules

A growing number of people in the U.S. are looking at investment properties as the best way to boost their incomes because they prove to be excellent sources of income for ambitious investors. But first-time owners have discovered that buying a rental property is far trickier than anticipated. This is especially true regarding eligibility for that crucial supplementary mortgage, the mortgage for a rental property. A primary dwelling and a rental property are not financed similarly. First-time purchasers should be prepared to meet some rather strict standards before they can expect to be approved for a mortgage because lenders tend to be more cautious about underwriting loans on rental properties. Even though it sounds complex, it simply requires comprehension. In this article, we’ll explain how you can get a mortgage for a rental property, the options available, the requirements for […]

October 4, 2022

Published by Bryan Hanley at October 4, 2022

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Investment Property Mortgage Rates

An investment property mortgage is a loan obtained to fund an asset with the potential to generate income. The best way to profit from real estate is through investment properties. Investment properties are purchased to rent out or sell for a profit, unlike primary. Investors can fund the acquisition or construction of investment properties with the aid of loans. Investment mortgages—also referred to as loans for rental property—are backed by the asset being financed. In other words, if you don’t comply with the loan agreements, the lender has the power to foreclose on your home. Investment property loans come in various forms, such as conventional loans, hard money loans, private money loans, and home equity/HELOC loans. Each loan has a distinct feature, prerequisites, advantages, and disadvantages. But one thing all these loans have in common is that their rates are […]

October 4, 2022

Published by Bryan Hanley at October 4, 2022

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Best way to get a mortgage for investment properties over $5,000,000

Owning an investment property provides an excellent opportunity to make money from real estate. However, getting an investment property requires a lot of financing and is, thus, mostly funded through mortgages. Getting a mortgage for an investment property is quite difficult already. But when it comes to investment properties over $5 million, it’s almost mission impossible. However, there are ways around it – there are effective ways to get mortgages for that luxurious property, whether you’re an individual or a group. This piece expires some of those ways. What qualifies as an Investment Property? A real estate property is considered an investment property if it was purchased to make a profit through rental income, potential resale, or both. Investment properties may be owned by an individual investor, investment firm, or corporation. These properties may be held for the long term […]

October 4, 2022

Published by Bryan Hanley at October 4, 2022

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Best way to get a Mortgage for Investment Properties over $10,000,000

Real estate investment requires a significant amount of money. With five or ten thousand dollars, you can comfortably get into the crypto or stocks market and make a healthy profit. However, when buying property, you need hundreds of thousands of dollars. Most times, you will need to get a mortgage to be able to afford a real estate property. Buying an investment property is one of the best ways to make money from real estate. Investment properties enable you to generate income through rent payments or equity appreciation. Getting a mortgage for an investment property is usually tricky. Lenders typically set steeper requirements to offset their increased risk on this type of loan. While it may be easy to meet these requirements on smaller amounts, getting an investment property loan for amounts running in the millions is usually herculean. This […]