BiggerPockets


Any loan officers/professionals with advice on how current sub2's will affect new commercial loan?

Forum Powered By:

6 posts by 4 users

To participate in forum discussions, create a free account or login.

Jay Gilkey

Multi-family Investor from Navarre Beach, Florida

Feb 11 '13, 01:45 PM


I have an appointment tomorrow afternoon with a commercial loan officer and want to be as prepared as possible so as to not shoot myself in the foot.

Here's my situation:

I am in the middle (in underwriting) of buying a new home. My current home will become a rental once I close and move out. I currently own (sub2) 2 other residential properties that are currently rented out. I am meeting with loan officer about financing a small 6 unit apartment building.

My goal is to voice my stance on moving forward after underwriting is done on my new home. My concern is in regards to how they will view the sub2 properties. Will they see them as outstanding debt, or since the seller is legally liable for them would it still viewed as his debt?

Further, since my name is on the deed, can I claim the rental monies off them? And finally, will it look to them as the properties are paid off since deed is in my name and there aren't any loans out for them in my name? Or should I just ignore them altogether as if they don't exist for the purpose of this new loan?

Sorry for the train wreck rant, just want to make sure I get all details out there so I can get some good advice.



Mike Shockley

Oklahoma City, Oklahoma

Feb 11 '13, 01:52 PM


Short answer is if you do not have loans in your name for those properties they will not count towards your debt/income, however you can claim the rental monies if you can show proof. Also, they will actually be viewed as assets since you technically own the property without a loan. Hope this helps.



Jay Gilkey

Multi-family Investor from Navarre Beach, Florida

Feb 12 '13, 09:15 AM


Awesome, thank you!



Derrick Moore

Commercial Lender from New York City, New York

Feb 18 '13, 04:17 PM


@Jay Gilkey is right on viewed as an asset, and the lender will ask you to fill out a personal financial statement (PFS); so they will see it. Its not going to hurt you.



Don Konipol

Hard Money Lender from Houston, Texas

Feb 18 '13, 04:48 PM
1 vote


In filling out your personal financial statement, you are required to both list the subject 2 properties as assets (as you do own them), and also list the debt against the property as a liability, although you can indicate that you are not liable for the debt. Yo list only the asset and not the debt would be falsifying your financial statement by providing a greatly inflated net worth. To leave off the debt is mortgage fraud. Please be careful about accepting off the cuff answers from people who lack knowledge in the business.



Derrick Moore

Commercial Lender from New York City, New York

Feb 20 '13, 06:31 PM


@Don Konipol: just keeping it short but I meant the whole thing; since you don't read between the lines
chumly!



(Don't Want to See This? Log in or Create a Free BiggerPockets.com Account!)

Ubg-book

Get the Free eBook from BiggerPockets

Get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks, and techniques delivered straight to your inbox twice weekly!

  • Actionable Advice for Getting Started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more!

Sign up below to download the eBook for FREE today!

We hate spam just as much as you


To post a reply or start a new discussion, create a free account or login.

Manage Keyword Alerts

View All Forums