California – the name conjures images of sun-kissed beaches, Hollywood glamour, and, for real estate investors, a diverse and robust property market. The Golden State’s real estate spectrum ranges from the picturesque Pacific Coast properties of Malibu to the opulent estates of Bel Air and the luxurious condos of Beverly Hills. However, this dazzling charm comes with high taxes, substantial insurance costs, and hefty condo association fees that often outstrip the rental income from these high-value properties. This disparity poses a significant challenge for investors and is rarely addressed by traditional lenders in their financing and refinancing programs.
Stratton Equities, an innovative force in the mortgage industry, enters the scene with its distinct “no ratio mortgage programs.” These programs sidestep the challenges presented by the conventional loan approval process, such as debt servicing, that often deter investors. Debt servicing comprises all the costs related to owning investment property – taxes, insurance, mortgage payments, and condo association dues. These costs are typically deducted from the potential rental income to determine the debt service coverage ratio (DSCR). However, a standard DSCR loan becomes inaccessible when the rental income does not surpass these costs.
Navigating through these challenges, Stratton Equities pioneers its “no ratio mortgage programs” in which the property is closed in an LLC. In these unique programs, the consideration of the borrower’s personal income or (DTI) Dept to Income doesn’t factor into the qualifications, allowing Stratton Equities to facilitate purchases or refinancing even if the property does not generate enough rental income. This flexibility, which could lead to a marginally slightly lower loan-to-value (LTV), nonetheless offers a solution to entrepreneurs, real estate and mortgage professionals, and mortgage brokers grappling with the high costs of property ownership in the California market.
Moreover, Stratton Equities recognizes and taps into the burgeoning potential of the Airbnb market, which is largely ignored by traditional lenders. Many investors opt for short-term rentals through platforms like Airbnb, which often yield higher revenue than long-term rentals. While a 12-month lease might generate $4,000 per month, short-term rentals can rake in three to four times that amount within a month. Despite this clear financial advantage, most lenders do not consider the higher short-term rental income when qualifying borrowers.
Stratton Equities, contrarily, takes into account the past 12 months’ history of short-term renting of a property on Airbnb. This allows borrowers to harness the higher monthly income, making it easier to service their debt. This inclusive approach proves particularly advantageous for investors in the California market, opening up new possibilities for investment and growth.
In addition to offering innovative programs and inclusive policies, Stratton Equities also boasts quick closing times and a solid network within the California real estate markets. The efficient closing process and vast connections enhance the experience and opportunities available to borrowers and investors, making Stratton Equities a valuable ally in navigating the bustling California property market.
Stratton Equities’ entry into the California market signals its commitment to empowering investors by providing flexible and innovative solutions to traditional challenges. By reshaping the real estate investment landscape in California, Stratton Equities continues to lead the way in fostering a dynamic and inclusive market.
About Stratton Equities
Stratton Equities, specializing in niche private money mortgage loan programs, works directly with entrepreneurs, real estate investors, mortgage borrowers, and mortgage and real estate professionals. They aim to reach $1.2 billion in closed loan volume annually or $100 million monthly. As part of their 2023 expansion and growth, they are increasing the team and hiring experienced Mortgage Loan Officers.
To learn more about Stratton Equities and its progressive approach to real estate investment, visit www.strattonequities.com. To stay connected with Stratton Equities, follow them on Instagram, Facebook, and YouTube @StrattonEquities, LinkedIn @stratton-equities, and Twitter @Strattonequity.
