At the other end of the mortgage market spectrum have been hardmoney lenders . They have certainly had their place in the market , although their highinterest rates and limited scope of underwriting hasn ’ t made them the optimal solution for many .
Today , BRRRRLoans , and private lenders , are providing much of the financing in today ' s investor climate .
BRRRRLoans is an assetbased lender . Though in contrast to hard money , they also look at DSCR ( Debt Service Coverage Ratio ), plus the strength of the borrower and their experience . This allows them to make more aggressive loans — with better rates and terms than hard money lenders — while providing loans that traditional mortgage lenders wouldn ’ t consider due to their rigid underwriting criteria .
The Current & Evolving Landscape
We picked Joe ’ s brain for his insights on the current market and what ’ s ahead .
While no one knows exactly how things will play out , with enduring inflation — the highest in 40 years — he acknowledges that we could probably use some cooling in the housing market . Not that we need a crash , but more sustainable growth would be wise .
We have already seen a significant reset in the past 90 days . Joe says that in addition to the extra inventory we ’ ve seen coming along over the past couple of months , there are a lot of foreclosures in the works . It could be another 12 or 18 months before they hit the market . Together these factors suggest that there is going to be a lot more negotiability for acquisitions coming and hopefully more discounts to be found .
So far the only obvious changes in the lending space have been in interest rates . Most of today ’ s investors weren ’ t around when rates were at 20 % or even 14 %. Joe says that while they might not get that high , they are indeed rising . He predicts they will likely hit the 8 % to 9 % range .
This should definitely be creating a sense of urgency among investors to do two things : 1 . Optimize current debt structures to make it through this phase of the market . 2 . Lock in great longterm fixed rates on new acquisitions while rates are low .
Additionally , investors need to be really getting in tune with their numbers , evaluating their assumptions and bids , and planning for new dynamics in the market .
Loan Programs To Fuel Your REI Business
Joseph V . Scorese says BRRRRLoans offers a variety of real estate financing options , including the following :
Fix & Flip Loans
Up to 90 % of purchase and repair costs , and closing in as little as one week . BRRRfriendly , and interestonly payment options .
Rental Property Loans
Loans for individual rental properties ,
While no one knows exactly how things will play out , with enduring inflation — the highest in 40 years — he acknowledges that we could probably use some cooling in the housing market . Not that we need a crash , but more sustainable growth would be wise . with 30year fixedrate options , no personal tax returns needed , and corporate borrowers allowed .
New Construction Loans
Groundup construction loans with interestonly payments for up to 24 months .
Multifamily Property Loans
Multifamily bridge loans for valueadd apartment building projects with loan amounts up to $ 15M , and no DSCR requirement at closing .
Portfolio Rental Loans & Blanket Mortgages
These loans are ideal for those with five or more rental units , with 30year fixedrate loans , and loan amounts up to $ 50M .
Smart Money Moves To Make Now
With the insights we gained from Joseph in our interview , it seems there are some obvious moves most investors should be making .
• Recalibrate your buying criteria to demand better deals
• Refinance now avoid rate shock on loans maturing in the next couple of years
• Lock in long term fixedrate loan terms on new acquisitions now
• Be sure you are staying on top of market changes on a daily basis
Find out more about BRRRLoans and their financing options at www . BRRRR . com .
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