Answers
Straight answers to investor financing questions.
120 questions answered in plain language, with the typical numbers, by a property developer and licensed appraiser. Every answer notes where the numbers vary by lender.
DSCR loans
- What DSCR ratio do I need for a rental property loan?
- How much down payment does a DSCR loan require?
- What credit score do you need for a DSCR loan?
- What interest rate should I expect on a DSCR loan?
- Can I get a DSCR loan on an Airbnb or short-term rental?
- Can I get a DSCR loan in an LLC?
- Do DSCR loans have prepayment penalties?
- Can I get a DSCR loan if the rent does not cover the payment?
- DSCR loan vs conventional investment property loan: which is better?
Bridge loans
- How much does a bridge loan cost?
- What is a bridge loan in commercial real estate?
- What are the requirements for a bridge loan?
- How long does a bridge loan take to close?
- Can I use a bridge loan to buy a property before I sell my current one?
- What is an interest reserve on a bridge loan?
- What exit strategies do bridge lenders accept?
- What happens if my bridge loan matures before I refinance?
- What is a bridge-to-perm loan?
Hard money
- How does a hard money loan work?
- What are typical hard money loan rates and points?
- How much will a hard money lender lend on a property?
- Can I get a hard money loan with bad credit?
- How fast can a hard money loan close?
- Hard money vs private money: what is the difference?
- How do rehab draws work on a hard money loan?
- What are the risks of a hard money loan?
Ground-up construction
- What are the requirements for a commercial construction loan?
- How much down payment do I need for a construction loan?
- What interest rate do construction loans charge?
- How does a construction loan draw schedule work?
- Can a first-time developer get a construction loan?
- Are construction loans interest only?
- How much contingency does a construction lender require?
- How do I refinance a construction loan into a permanent loan?
- Can I get a construction loan for a spec house?
Land loans
- Can I get a loan to buy raw land?
- How much down payment does a land loan require?
- What interest rates do land loans charge?
- Is it easier to finance entitled land than raw land?
- How do I go from a land loan to a construction loan?
- Can I get a construction loan on land I already own?
- How long are land loan terms?
- Can a seller finance the land while a lender finances the build?
SBA 7(a) and 504
- Can I get an SBA 7(a) loan to buy a self storage facility?
- SBA 7(a) vs 504: which loan is better for buying a building?
- How much down payment does an SBA real estate loan need?
- What interest rate does an SBA 504 loan have?
- What is the SBA 51 percent owner-occupancy rule?
- How long does an SBA loan take to close?
- What credit score do I need for an SBA loan?
- Can I use an SBA loan for ground-up construction?
- Can I refinance commercial real estate with an SBA loan?
Fix and flip
- What are the requirements for a fix and flip loan?
- How much does a fix and flip loan cost?
- Can I get a fix and flip loan on my first flip?
- What do LTC and ARV mean on a flip loan?
- Will a lender finance my rehab budget?
- How long is a fix and flip loan term?
- What if I decide to keep the flip as a rental?
- Should I take a flip loan in an LLC?
Multifamily 5+ units
- How is a loan on 5+ units different from a 1-4 unit loan?
- How much down payment do I need for an apartment building?
- What DSCR do lenders require on multifamily?
- What is an agency small balance multifamily loan?
- What interest rates do apartment loans have?
- How do I finance a value-add apartment building?
- Do I need experience to buy a 5+ unit building?
- What is a non-recourse multifamily loan?
- What is the minimum loan amount for multifamily lenders?
Mixed-use
- How do you finance a mixed-use property?
- Is a mixed-use building a residential or commercial loan?
- Can I get a DSCR loan on a mixed-use property?
- Can I finance a mixed-use building with a vacant storefront?
- How much down payment does a mixed-use loan need?
- Can I use an SBA loan on a mixed-use building?
- How is a mixed-use property appraised?
- Can I get a loan on a building where I live and run my business?
Self storage
- What are the financing options for a self storage facility?
- How much down payment do I need for a self storage facility?
- How do I finance a ground-up self storage build?
- What occupancy do lenders require on self storage?
- What interest rates do self storage loans have?
- Can I finance converting a warehouse into self storage?
- Can I cash-out refinance a self storage facility?
- Can I buy a self storage facility with no experience?
Refinancing out of hard money
- How soon can I refinance out of a hard money loan?
- What are seasoning requirements on a refinance?
- How does a cash-out refinance on an investment property work?
- Can I refinance a hard money loan into a DSCR loan?
- What if my refinance appraisal comes in low?
- How does the refinance step of BRRRR work?
- What is delayed financing after a cash purchase?
- Can I refinance out of hard money with bad credit?
Pre-qualification and term sheets
- What is a pre-qualification letter for a commercial loan?
- Pre-qualification vs pre-approval: what is the difference?
- What is a term sheet from a commercial lender?
- How do I read a commercial loan term sheet?
- How many term sheets should I get before choosing a lender?
- Term sheet vs commitment letter: what is binding?
- How long does it take to get a pre-qualification letter?
- What can change between the term sheet and closing?
What lenders require
- What do lenders mean by reserves and how many months do I need?
- What is a personal financial statement and what goes on it?
- How much real estate experience do lenders require?
- What is global cash flow and why do lenders check it?
- What documents do I need for a commercial real estate loan?
- Do I have to sign a personal guarantee on a commercial loan?
- How much liquidity do commercial lenders require?
- How does the appraisal work on a commercial loan?
Can I get a loan if...
- Can I get an investment property loan with a 620 credit score?
- Can I get a commercial loan with limited cash reserves?
- Can I get an investment property loan after a bankruptcy?
- Can I get a real estate loan after a foreclosure?
- Can I get a loan as a first-time developer?
- Can I get a real estate loan in an LLC?
- Can a foreign national get a US investment property loan?
- Can I get an investment loan if I am self-employed with low tax returns?
- Can I get a loan if I already have 10 financed properties?
- Can I get a loan with tax liens or judgments?
- Can I get a loan with a partner who has better credit or more cash?
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