Investor Loans Made Simple: DSCR, Rehab Financing, and Fast Closings Explained

Brent Graney (00:00)
But we have programs like profit and loss. So in that case, there’s going to be a profit and loss that the borrower provides and it’s prepared by their accountant. And we can use that profit and loss for the last 12 months as income for the borrower. So they’re not providing tax returns. They’re not providing bank statements. They’re just providing

those the profit and loss and then bank statements would actually be provided only for down payment.

Dylan Silver (01:58)
Hey folks, welcome back to the show. Returning guest, Brent Graney joins us today out of South Florida and has over 23 years of experience in mortgage financing. He helps buyers and investors structure deals, secure financing, and actually get loans closed. Today he focuses on improving operations and making the process much faster and more consistent without losing the personal touch. He’s worked through multiple market cycles and understands what it takes to get deals done while still building real relationships with clients. Brent.

Thank you for joining us today.

Brent Graney (02:29)
Thank you for having me, Dylan. I really appreciate it.

Dylan Silver (02:32)
Now, with everything moving towards automations and people sometimes feeling like they have to be both quick but also without losing the personal touch, where do you see things moving to and how are you incorporating these in your business?

Brent Graney (02:48)
So there’s a huge movement when it comes to automations. And I think that some mortgage companies have gone a little bit too far on that and lost their personal touch. So we’re focusing on keeping the personal touch, having those conversations of what’s important to our clients, but also having the automations in place to help move the process along faster. So we’re trying to close purchase loans in two weeks or less. And we want at least have our process done and we’re waiting on other parties at that point.

And that’s all because of the automations that we’ve been implementing.

Dylan Silver (03:21)
Now, I think for everyone listening or thinking, well, if I’m thinking about getting a loan for a single family property, the process is always a drawn out process and it takes, you know, at minimum 30 days. How can you simplify the process down to two weeks?

Brent Graney (03:39)
So part of it is the partners that we have in place when it comes to a title, for example. The title companies that we use, they’re very fast at getting us the title work that we need in 24 to 48 hours. And that way, if there’s any issues on title that need to be cleared, they have time to clear them and they’re very fast at clearing them. In the past, that’s been one part of the process that will slow us down. So we’ve gotten that taken care of, and we actually have ways of communicating with them, automations actually that are in place that…

when a file is started in our system, the title work is automatically ordered. So, you know, letting them know that we have a new file and it’s ordered the same day and they can already start working on that. And that really helps shorten the process. Same thing with getting the property valuation. We have some different products that don’t require appraisal any longer. So we’re able to use those valuations that are done within the same day of the receive the application and or the ⁓ the actual contract. So we get a purchase contract in.

and it triggers our system to say, okay, we need title, we need to get evaluation on it. Do we actually need an appraisal? And if we did an appraisal, we ordered it right away. So that way that’s already, those are two of the main things that will slow down the process. But the automation is coming in where the experience between the borrower and the lender with us saying, okay, we need XYZ for documentation. And then you provide documentation,

but the system is now looking at the documents along with someone overlooking, it could be, it’s gonna be an underwriter.

It’s going to be a processor, but it’s going to get back to you very quickly as a borrower saying, thank you for sending these documents over, but based on what you sent, we’re going to need these other two or three documents. And we try to just move very quickly on the documentation that we know the underwriter will need. And those automations of following up and getting back to the borrower have been shortened quite a bit.

Dylan Silver (06:10)
Now

I’d like to, and I don’t know how much we can get into this, but I’d like to ask you about for investors, the loan products that make sense because on a two week timeline, that’s competitive with anything that investors will find really anywhere. So what products are you able to offer investors currently?

Brent Graney (06:34)
So that’s great question because we’re big on investors. Right now we’re doing probably about 45 % investment business out of the loans that we originate right now. It’s about 45%. It’s never been this high. So we’re doing debt. We have a debt service coverage ratio program, which looks at the property. So instead of the individual qualifying, the property’s qualifying. So the mortgage payment needs to be less than or equal to what that property rents for.

What we’re doing is teaming up and partnering with the best lenders in that field because there are a lot and we’ve narrowed it down to the top three that we work with and one of them is a very new lender, meaning there’s a lot of experience behind them, the people that open the company, but they’re big on the automations and the speed. So we fit together very well. We mesh together in a way that we benefit the investor so we can get all those items, the title, appraisal and

assets reviewed everything very quickly on a DSCR loan, for example, and still close in in two weeks to make, but we’re making sure upfront, the first three days are extremely critical when in the past, traditionally with lending, you’re like, okay, you get the contract in and then maybe the appraisals ordered a week later and titles the same thing. It’s just a slower process that we like, we have 30 days. Now we don’t look at it as we have 30 days. Even if the contract says 30 days or 45, we still try to hit that two week mark.

on every file.

Dylan Silver (08:03)
Now in DSCR specifically, ⁓ can rehab be included in that loan or is this something that you would only use if the property is already a rental grade or in a flip condition?

Brent Graney (08:18)
So we actually do have partners that we are working with that we do rehab. Rehab for a fix and flip and rehab for long term. We have both products. Now, one of those lenders will also use DSCR, which is rare in this industry. The other one is a full documentation where you are showing the income. They do up to 90 % financing, so you put 10 % down. And then when it comes to the disbursements that are made,

Dylan Silver (08:40)
Yeah.

Brent Graney (08:48)
Let’s say that the property needs a new roof. The roof is 15,000, the roof is done, and it can either be paid by the borrower to the contractor, or if the contractor’s allowing 30 days on an invoice, it can be invoiced and they’ll be reimbursed, and it gets added to the loan amount that they have on the 90 % financing. And all in all, let’s say that they have 50,000 added, they bought the property for 100,000, they got a loan for 90,000 to buy the property.

and now they have $50,000 on top of that for things that need to be repaired, and we add it to the loan. So now they owe $140,000, and then we also have a ratio of what the property… We look at what the property is going to be worth after it’s repaired, so an after repair value, and then we lend 75 % of that. we have that program in place, so we’re able to help people that are looking to do rehabs for either long-term or fixed inflip.

Dylan Silver (09:43)
This is a really, I would say, niche and relatively rare product to be offering, especially since you’re also helping people looking for their homestead, right? And I’m almost grasping at straws to even think about the possibilities here because most of the time that I’ve seen,

lenders are either working strictly, hard money, working with investors and that’s it, or they’re strictly working with ⁓ people looking for their forever home, their homestead.

but you’re doing both. Do you see this as a trend which more lenders will start to get involved with or is this something that is very specific to what you have going on?

Brent Graney (10:59)
It’s really a niche because what’s happening is over time we’re always trying to partner with new investors out there. We’re always looking for new programs and we find more often that those programs, once we do find them and we partner with them, that we’re offering something that is very hard to find. And Fix and Flip is a great example because I get a lot of emails from different investors that are looking to partner with brokers such as myself and we…

Dylan Silver (11:15)
Yeah.

Brent Graney (11:26)
I see less of those. I see less and less of those investors out there. so I look at it like we’re able to offer something that’s not out there and not prevalent and not easy to find. We can do over four unit, which becomes commercial as well. We do that. And we really try to work with any borrower with any situation. Mixed use. I’m working on a mixed use right now in central Florida. So it can be a property that looks like a house, but it’s a beauty salon.

And there’s many different, we try to look for every product. And I think that we have a pretty good arsenal under our belt right now where we’re able to help a lot of different types of investors and borrowers looking to buy either a primary or an investment property. The investment side is even a wider spectrum of programs compared to even last year. We have many more programs now available even for cashflow could be, we have no income verification, HELOC loans.

So they get a line of credit on an investment property, maybe to put money into that property and do a rehab on it after they already own it or to buy another property. So we’re looking at a cashflow because investors traditionally don’t come to us and say, here’s our tax returns. We’re showing a ton of income on the tax returns for lending purposes. And we want to go ahead and invest on another property. It’s the opposite, right? So we can get them the cash that they need either for fixing up the home.

Dylan Silver (12:45)
It’s the opposite. Here’s no income. ⁓

Brent Graney (12:52)
you know, doing renovations or to buy another property. And investors really like that to be able to do that.

Dylan Silver (12:57)
This

is where I go with it when I hear of what you’re doing. So many people would like to get into real estate investing, but it’s a process because even if you buy your first home, on some level that makes you an investor, but you’re not renting that property out. So then when you go to just even start to think about, well, how am gonna get this second mortgage? What’s this gonna look like? Who do I go to? You oftentimes have to make a whole new network, a whole new sphere of people.

And I’m imagining you have people who may have gotten their homestead and now they’re coming to you saying, hey, do you work with investors? How would I go about this process? And then from there, you can explain, know, HELOCs and HELOANS and cash out refi and so forth.

Brent Graney (13:43)
Correct. Yes, we actually have a lot of borrowers that they buy their first home with us and then they buy an investment property down the road or they buy another primary and their property that they had becomes investment.

I like to take the time to explain to each individual, whether they’re buying their first home or they’re buying their third property, I explain to them what’s actually available because they’re not sure of the resources and they’ve heard a lot of different myths about down payments and things like that that are tied in with buying an investment property. And the investors that are actually funding these loans and the different companies are getting more aggressive on the investor’s side.

you know, because they see the need for that product. And Fannie Mae, which is conventional loans, they’ve actually started to limit how much banks can write on investment property loans. So they’re cutting back on the conventional side. And then the non QM side, which is, which is just, it’s more open. It’s not, it’s a non qualified mortgage, DSCR, that’s opening up to where now there’s more opportunity and people just aren’t aware of the products that are out there. And

Dylan Silver (14:52)
Yeah.

Brent Graney (14:53)
I look for products all the time. And we’ve been able to partner. We’re partnered right now with 37 different lenders

and 31 actually have investment products. So we’re very heavy on the investor side on helping people buy that first investment property after they bought their primary. Now we also have a lender that will allow a first time investor to buy with the DSCR program without a housing history.

And that’s rare in this industry because most of them want some type of housing history for 12 months. We can do it with no housing history and it’s truly a DSCR program. And we’re able to do that now as well. And that’s something new that we have.

Dylan Silver (16:05)
Yeah, that’s true.

Now for folks who are in their first couple of years in business working for themselves and they’re getting their bookkeeping set up and they’re looking at getting into real estate investing, they may come to you in all different kinds of conditions from lots of great books to maybe not the best bookkeeping to having filed their taxes, to not having filed their taxes, to having lots of available cash to maybe not so much. What’s these first conversations

look like these days when people are coming to you.

Brent Graney (16:55)
So that’s a great question. We actually have to kind of dive into their books in a way. I asked for bank statements for the last 12 months, personal and business. And I start to look at their trends and transactions and where is the money coming in? When is it coming in? Some of the businesses are seasonal. I look at the length of time they’ve been open. And we can do one year, self-employed by the way, on our lending programs for primary and investment.

property properties. So that’s something that’s pretty unique as well in the industry.

we have programs like profit and loss. So in that case, there’s going to be a profit and loss that the borrower provides and it’s prepared by their accountant. And we can use that profit and loss for the last 12 months as income for the borrower. So they’re not providing tax returns. They’re not providing bank statements. They’re just providing

those the profit and loss and then bank statements would actually be provided only for down

It’s not for income, but the profit and loss is used for income and the rates are actually competitive, surprisingly competitive. They’re in the sixes. So this is a program that is extremely aggressive when it comes to this is primary and investment properties. And that’s one of the things that we do when they don’t have the books necessarily organized. They make money, but they want to qualify for a loan.

Dylan Silver (18:16)
great one.

Brent Graney (18:17)
Yeah, they don’t show their tax returns and it’s like, I bridged the gap between, okay, a gentleman that or a person that makes this amount of money and I could find it and I can see how they make it versus, know, and then bring them to the closing table. So it’s closing that gap where if they walked into a traditional bank, the bank would say, sorry, we can’t help you. We saw your tax returns, you wrote off your expenses and you’re left with a bottom line that’s not enough to qualify. That’s where we come in. We shine there because…

The profit and loss that we use is based on the revenue of the company. So it helps these individuals a lot to be able to use a profit and loss or bank statements. We use those as I mentioned that shows after I review bank statements, if I see that’s an avenue, we go that route and you can put 10 % down and buy the property with bank statement income, either personal or business bank statements. And that’s a great avenue as well for someone who just doesn’t have the tax returns.

Dylan Silver (19:12)
Now, if they’re trying to get their financing set up, do they have to come with a property in mind so that that can be evaluated as well? Or is it they can come with an idea like, I’d like to buy a single family, hey, I’d like to buy a duplex or a triplex, quadplex in this area, and that’s sufficient.

Brent Graney (19:32)
Both are fine. I give them an idea. If they don’t have a property address already, I do look at the property type and kind of a ballpark on when it comes to the purchase price. And then I work back from there. Like this is how much your taxes should be, how much your insurance should be. And then I give them an estimate based on that. If they have a property, I can fine tune it better and I can give them an estimate that’s gonna be more accurate because then we know exactly the property type and we know the address and I can look at the taxes and I can work the numbers.

a little bit more accurate for them, but I can work with them either way.

Dylan Silver (20:06)
Now for investors who may be coming from a perspective of like a discovery call, right? And they’re not exactly sure. And I’m imagining you get quite a number of these where, hey, I’m looking to make a real estate investment. I’m not really sure if I want to go short-term rental, long-term, where I’m going to be buying, if I want to go duplex, triplex, quadplex. How do those conversations, you know,

matriculate into ⁓ a closing when even the investor themselves may be unsure which direction they want to go.

Brent Graney (20:40)
That’s a great question. What I do is I compare it with the trends that are currently happening with my other clients. So I give them examples. I said, well, I just closed the triplex in this area and it was a great investment opportunity. Here’s the numbers. And I go over that with them. And then I say, that’s one option that I saw worked well for this particular investor. And then I say, well, there’s also some other loans that just closed recently. And this is what they did.

little bit lower price point, this might be a duplex instead of a triplex. And I go into detail on that with them and I say, this is going to be your return on this investment versus the triplex is going to be a little bit more money, but this is going to be your return long-term. And then I try to figure out if they’re looking to buy, you know, where they live. And I say, do you want someone to manage the property or are you going to manage the property? Do you want to, how big do you want to build your portfolio? You know, and some people will say, well, you know, my wife’s pregnant. I want to get this one in and then we’re probably going to have a

few more kids down the road and I want to focus on family, I don’t want to be dealing with these properties, but I do want to have one or two now that I have a lump sum of money from whichever source or they have, depending on what’s going on in their life at the time. And I run with that. say, okay, if you’re going to do something that’s going to be more short term, let’s look at this. This area does Airbnb. This ⁓ county does not allow it. This is another example of what I closed. And then let’s look at long-term.

you’re trying to build something for your family, you’re trying to build a portfolio, let’s get one in your, you have your house where you live, let’s get one investment property done, and then everything that’s going on in your personal life, let that, you go forward with that, and then you live your life, of course, and then you will circle back so you can build on this portfolio. I kind of let them guide a little bit when it comes to the personal side, of course, to say, what are, what’s your…

Dylan Silver (22:22)
Yeah.

Brent Graney (22:30)
current situation and what’s your goal? Why are you buying investment properties? And there’s always a reason behind it. Or primary, why are you buying a primary? What’s going on? Well, my family’s growing. that’s great. Congratulations. Have you thought about buying an investment property? I inject that at the right time in the conversation. My idea is to say, listen, I’ve seen real estate investing work for many people and I’m going to tell you how it works and I’m going to give you ideas, but I’m going to let you kind of decide, fill in the blanks a little bit too.

but I’ll let you know what worked for other investors. think that’s my best gauge and my best compass.

Dylan Silver (23:04)
Yeah, I mean, that consultative approach makes you very unique because, you know, people when they don’t have someone to turn to would love to be able to go to their realtor, go to their lender. But typically, you know, the lender might say or the realtor might say, you know, I’m not an investment advisor. You know, this isn’t the niche that I’m in. But you’re on both sides working with, you know, single family buyers looking for their homes that working with investors, ⁓ even, you know, beyond a quadplex. So you really have a good

dearth of knowledge and when folks are making that decision they can rely on the information that you’re giving them based off past successful experiences. So here’s what similar investors are buying and here’s what’s been successful. That’s a powerful testimony. We are coming up on time here though Brent. Any new projects that you’re working on and what’s the best way for folks to reach out to you these days?

Brent Graney (23:57)
So right now we’re just working on the customer experience just to continue our five-star rating. We want to make sure that the experience is the very best that it can be.

And so we’re working on a few additional automations and we’re always looking for new programs to help borrowers such as down payment assistance. We are now fully approved with the Miami-Dade down payment assistance program. Gives up to $28,000 towards the purchase of a home. So we have the Florida bond as well. So a lot of things kind of at the same time, but a lot of it is automations, customer experience, and then down payment assistance, which kind of ties in with that customer experience.

I can be found online at our website is www.floridahomefinance.mortgage. I’m on Instagram, your_mortgage_guy. So it’s your underscore mortgage underscore guy. And I’m on on we’re on Facebook as well. And that’s just the name of the company Florida Home Finance. We’re on there as well. And if you Google us, you’ll find us very quickly and you’ll be able to look at our reviews. But if you just Google Florida Home Finance.

⁓ Check out the website like I mentioned. You can apply very quickly on the website as well. Or you can just give me a call at 786-385-0511 and I’d love to chat with you and just find out more or less what you’re looking to do and build a game plan. If now’s not the time, then we’ll get you set up to buy something in the future.