Need Hard Money and Perm Cash-out RE-FI for KC Missouri

I have access to multiple 3 and 4 bedroom section 8 rental properties in Kansas City, Missouri and have buyers waiting to purchase assignments from me. I have a primary lender that is not delivering on promises made. Would like to move ASAP to insert a new lending resource that is familiar with this great cash flow market. I have multiple investors that would need to be pre-qualified and funded.
Lending specifications required:
Hard Money or Private Money to fund rehab and close
70% LTV based on ARV (after repair value)
Ideal time frame to close once investor is pre-qual'd = 2 weeks or less.
Average ARV is 70-85K
Permanent Cash-out refinance
80% LTV based on ARV with cash-out

I am going to show a heavy dose of pleasant skepticism. Please provide at least 3 references for investors you have completed funding with, so that I can speak with folks you've worked with - preferably in KC, MO market. I have heard too many promises that haven't been delivered on - so I will be triple checking with references. If you can't provide this - no need to contact me. I sincerely look forward to working with anyone who can deliver consistently and quickly on above.

Best,

Edited: 06/26/2010 at 05:12AM

Dawn Vought

Real Estate Investor · Commack, New York

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May 17 '08, 08:18 PM

I need the same or very similar for the refi part only. I have 3 houses in KC that have been rehabbed, Section 8 tenants are in, and the houses are cash flowing.

Looking to refi at 75% LTV. My middle credit score is 793.

At the first bank, the underwriter didn't like the " feel" of the loan, whatever that means, and I would have had to come out of pocket. I had just closed a couple of similar houses in AL with this lender.

Now trying with WaMu. WaMu appraisers came in with a lot lower numbers than the appraisals done for the first bank a couple of months ago. I have submitted a whole list of comps that justify the anticipated number and higher. The WaMu appraisers seemed to purposely take the lowest comps into account.

Main problem is most of the comps on the MLS involve investor transactions, REOs, bank sales, or some other type of motivated seller. The area is very stable, and the " normal" transactions are few and far between.

The WaMu appraisers have agreed to re-evaluate the numbers based upon the list of comps I provided. (They wouldn't accept the appraisal from the first bank that was done a couple of months ago, probably because they wanted to make their fee.) I should hear something this week. Of course this means indirectly they would be admitting they made a mistake, so I'm not confident they will do much, considering they are off by about $15K - $24K. I can't even get legible copies of their appraisals at this point.

If anyone has a program that will get through (with a lender that isn't afraid to appraise correctly), please let me know, as I plan on buying a lot more houses in the KC (and Birmingham, AL) areas.

Thanks.

Edited: 06/26/2010 at 05:13AM

Tom Cooke

· Long Beach, California

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May 17 '08, 10:56 PM

Hi Dawn,

I've seen the same issues you describe with the way CMA's are being analyzed against MLS data especially with property east of I-71, lenders do not like the 64130 area code right now for some reason. This just happened recently and it's a shame because a) there are unbelievable deals over there and b) the investor purchases are a completely unrealistic way to benchmark comps. Show me where you can buy a fully re-habbed property for $10K and I'll buy 100 of them!

At any rate - our company is working hard to find a lending resource that will service our deals and clients properly. I do have one lending brokerage that may be able to position themselves to do both the hard / private money in and the perm cash out re-fi. They have built up a $5M private equity pool for front end and have no problem doing back end. The problem is service level because they're doing REO bulks - I'm not holding my breath on them. Our company also has access to great deals in KC - so if you're looking to buy I'd love to work with you as a client. We're focusing most of our energy west of I-71 in reaction to the lending issues, it's a slightly smaller market and so the prices go up a little and the number of deals / frequency you can get them at goes down a little as well. But if you can't fund the deal - it's not a deal right?

Shoot me a private email if you get a chance and let's continue to liase on this problem and we can probably help each other out. My contact details are in my profile. I haven't posted enough yet to put my email in this post!

Thanks,

Edited: 06/26/2010 at 05:13AM

Ben Carmona

· Wentzville/St. Louis, Missouri

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Jun 16 '08, 01:47 AM

The biggest issue the 2 of you will be challenged with is how may properties you own which are financed. 10 financed properties is the limit for full doc loans and 5 for stated income verified asset loans.

Cash Out refinances under conforming guidelines are nothing special. Fannie Mae, which creates the guidelines for most lenders to follow, does not have a seasoning time to use the actual appraisal value. A strong appraisal showing the property was purchased below market value, repair work done, and inside/outside before/after pics shold be enough. If your market area has been flooded with REOs then of course the lenders will take a closer look at it.

You can get as many references as you like for those qualified enough to get these done but that doesnt prevent the fact that guidelines are changing constantly. I'm sure you realize that brokers are not in control of this but hopefuly are prepared enough in keeping up with the industry.

As a side note: If you're using loans to purchase the property do not use fianacing in the name of a business. In 1/2008 Fannie created a new guideline which prevents investors from refinancing their business loan using a new conforming personal loan. There's a whole series of steps that must be taken to accomodate scenarios like this and it takes a bit of time to correct.

Edited: 06/26/2010 at 05:20AM

Tom Cooke

· Long Beach, California

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Jun 18 '08, 09:35 PM

Hi,

Thanks for your input. Are you a lender? Can you refer any lenders who will fund the perm re-fi for our scenario? I need to get 2 additional lenders in place quickly so that I can move my business forward in KC. I have a team of investors who are going to be purchasing from me and my primary lender hasn't performed to my satisfaction.

Please get back to me with recommendations on which lenders to contact that have a proven track record.

Thx!

Edited: 06/26/2010 at 05:21AM

Jason Trepins

Real Estate Investor · Wyoming, Michigan

195 posts
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Jun 20 '08, 12:55 AM

I'm also interested in the same information...

Looking for lender(s) who can do cash out refi at around 70% of the ARV, no seasoning(rehab crews are done in 3 to 4 weeks on average)..and these properties are quickly filled with tenants by the management company and are cash flowing

I have a 2 unit right now that needs to be refi'd just to pay off what is into it. Most likely needs to be no doc and based on credit scores and assets.
Cash flows gross = $1275/month
Owes less than 40K on the property.

Edited: 06/26/2010 at 05:22AM

Ben Carmona

· Wentzville/St. Louis, Missouri

359 posts
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Jun 21 '08, 10:25 AM

You're more than welcomed to have the same information. We can speak offline to start off.

Conventional lenders do offer cashout refinances with no seasoning. Can be done as stated income up to 70%.

Doing as a no doc (no employment listed, no income listed, and no assets) listed is no longer a loan available with conventional lenders). You'd need a hard money lender or private lender which terms will be short and not attractive for holding. It may even be hard to find a hard money lender to refinance it. Most hard money lenders want to be on the initial purchase rather than the take out loan.

Even tougher is doing loans under $50,000.

Have you tried local banks for this refi. Sounds like a great deal for a local bank.

Edited: 06/26/2010 at 05:22AM