Infinity Commercial Capital

When borrowers explore loan options, they often encounter lenders’ marketing materials promising loan amounts “up to” a certain loan-to-value (LTV) ratio. However, it is not uncommon for borrowers to receive loan offers that fall below the advertised maximum. Let’s explore the reasons why lenders may offer less than the “up to” amount like debt service coverage ratio, creditworthiness, and property considerations. The Underwriting Process and Loan Limitations The underwriting process is an essential step in lending where lenders assess the borrower’s financial capacity and the risk associated with the loan. During underwriting, lenders evaluate various factors and may determine that offering less than the advertised maximum LTV ratio is prudent. This ensures responsible lending practices and mitigates potential risks. Factors that influence loan offers include: Debt Service Coverage Ratio (DSCR) One primary factor that influences a lender’...

In the world of real estate investing, one popular strategy is fixing and flipping properties. This involves purchasing a property in need of renovation, improving it, and selling it for a profit. To finance such projects, real estate investors often seek loans. While traditional banks have been the go-to option for many, private Debt Service Coverage Ratio (DSCR) lenders have emerged as a viable alternative. Streamlined Approval Process Private DSCR lenders typically offer a more streamlined and efficient approval process compared to banks. Traditional banks often require extensive documentation and have stringent qualification criteria, resulting in a time-consuming and complex application process. In contrast, private DSCR lenders focus on the property’s potential profitability, allowing investors to secure loans quickly, and enabling them to act swiftly in a competitive real estate market. Flexible Credit Requirements Banks heavily rely on credit scores and credit history to d...

Investing in rental properties is a popular way to generate passive income and build wealth over time. However, securing financing for these types of investments can be challenging. Traditional bank loans are often difficult to obtain, particularly for new investors or those with less-than-perfect credit. Fortunately, there is an alternative financing option that can help investors overcome these obstacles: DSCR loans. Benefits of DSCR Loans DSCR stands for Debt Service Coverage Ratio, and DSCR loans are specifically designed for rental property investors. Here are a few advantages of DSCR loans over traditional bank loans: Longer loan terms: Most bank loans for rental properties come with a 5-year term, which means that the borrower must refinance or pay off the loan after 5 years. In contrast, DSCR loans often have a longer loan term, such as 30 years, giving investors more time to pay off the loan and generate income from the property. Fixed interest rates: Many DSCR loans come with...

Infinity Commercial Capital is proud to have recently funded a client’s acquisition of a rental property, helping her expand her portfolio and generate passive income. We’re thrilled to have been a part of this success story and are excited to share the details of this transaction. The Situation Our client was a real estate investor who was looking to expand her portfolio with the acquisition of a rental property. She had identified a property that was a perfect fit for her investment goals, but she needed financing to make the purchase. She had previously worked with traditional lenders who had offered her short-term, high-interest loans that did not align with her long-term investment strategy. She was looking for a better solution to help her acquire this property and grow her portfolio. The Solution Our team worked closely with the client to understand her investment goals and financial situation. We recommended a 30-year fixed-rate commercial loan that would provide her with ...

W. Karl Baker, CPA When discussing commercial financing needs with prospective clients, one of the first things we get asked all the time is “What’s the rate?”  That depends on a lot of factors, such as property address, the borrower’s credit score, net cash flows from the lease agreement, leverage and a few other factors.   We also remind clients that “rate” is important but is not always the most important factor if cash flow is the goal. It’s certainly not the only factor to evaluate.   We also are asked, “What’s the term of your notes?”  Many people are surprised that it is possible to obtain 30-year commercial money, especially if their only experience is what banks offer.  So there’s usually a follow-up question when we tell them about our 30-year fixed rate commercial mortgages:  “Is it really FIXED for 30 years, and it’s a commercial note?”, said with some astonishment!  Our response is “YES!  You really can get a 30-year fixed-r...

By W. Karl Baker, CPA Industry commercial lending underwriting criteria contain some “norms” that are universally agreed upon but applied differently from lender to lender.  One of those “norms” is the rule of thumb that lenders will loan at 80% of the value of the subject property in a purchase transaction with long-term financing, and then this metric is often scaled back to 75% for a cash-out refinancing, to hedge valuation risk.   Lenders do not set these norms in a vacuum.  Private lenders sell the majority of their long-term loans and some of their bridge loans to the capital markets. These institutional buyers pool loans into packages and convert them to bond funds, called mortgage-backed securities.  Investors buy these funds with the expectation that they will obtain a return on investment commensurate with the risk.  This is a macro-economic way to put capital into the market, allowing property buyers and investors to finance their purchases with low-cost loan terms. Therefor...

By W. Karl Baker, CPA There’s lots of news out there saying “now’s not the time.” “The economy is slowing down.” “We’re headed towards a recession.” “The cost of borrowing is going up.” This is a good one: “Rates will go down eventually and that will be the time.” I heard a podcast recently that gave the quote from a celebrity author, “Don’t wait to buy real estate.  Buy real estate and wait.” That really resonated with me, so I looked it up. The best I can tell it was mis-attributed and is actually a  Will Rogers quote.   As I’m writing this I’ve been thinking about another phrase “‘tis the season”. It’s the Christmas holiday season. It’s a time when people are reflective. It’s a time for love, and there are many other important things to celebrate at Christmas, such as the birth of a savior. However, I’ve also been struck with that phrase as a mantra for rea...