Jeff writes: How would you finance unconventional residential rentals (commercial) in this market?
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Welcome back to the real investing show. I’m Tim Herriage. Thank you for coming back today. Jeff rights, how would you finance unconventional residential rentals commercial in this market? Uh <laugh> well, I won’t say I wouldn’t because you asked me how I would. So right now in this market, Jeff, I feel like anything that’s not, I, I use this phrase a lot. Cookie cutter, bread and butter. That’s not just the three bedroom, two bath, two car garage, brick house in a nice neighborhood. Feel like a local. Bank’s gonna be your best option. Now, if it’s a mixed use property, we’re happy to look at it at RCN capital, but I mean, I, I just, it, I gotta have more, more information on this question, Jeff. So if I’m doing a fix and flip, I’m probably going through RCN because I can get more leverage. And right now I feel like, you know, debt is definitely cheaper than equity.
If we’re talking long-term rental, depending on the loan size, I’m probably looking at a community bank mainly because, you know, typically with community banks, you’re not seeing prepayment penalties, typically they’re indexing their rates off of a wall street, journal prime, a li B, something of that nature. And typically they’re not dependent upon securitization execution to kind of, you know, fund the takeout of the loan. So I’ve always said this, even though I’m a national lender, you’ve got to keep your options open. There will be times in market cycles where the best thing is not the normal thing. So to tip, to stick to your question, if I had something that was unconventional in, in today’s market cycle that I wanted to fix and flip, I’d probably still go with like a larger national lender, like RCN capital. You can find firstname.lastname@example.org, uh, slash podcast. Uh <laugh> but if I was looking to keep it as a rental property with rates kind of jumping all over where they are right now, I’d probably go to a local community bank. So, Jeff, I really appreciate it. Thank you so much for taking the time to submit a question. If you’re out there listening and you have questions hop on over to, Ihavelunchmoney.com. I would love to answer your questions. I’m doing my best to get to every question. Uh, and I look forward to answering yours. So until tomorrow, have a great
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