Wentzville/St. Louis, MO · Member since 2008 · 359 posts · 1 vote
18y
My thoughts would be that you really need to evaluate putting down 20%. What are future investment goals? If you put that 20% down will you have other resources for additional properties? Can you get that 20% back out later?
You may want to speak to local banks where you are located. Talk to them about getting a commercial loan rather than a conforming loan. As you build your investment business it will eventually become a necessity to build business with the small local banks. They'll have lower cost than a broker but the rates may be a bit higher and on shorter terms.
How much of a discount are you buying the property at? Do you have the ability to pay all cash (heloc) for the property. You could then turn around and refinance to get your cash out and the ltv would be much lower. Effectively, you'd be able to get in with no money down.
Many investors are using hard money lenders right now. (even those with good creditentials. The reason is they can get into the property with very little out of their pocket and then refinance of the purchase loans as mentioned above.
There are plent of sources for financing on this forum so you should havent a problem. Any of us can help answer your questions.
Atlanta, GA · Member since 2008 · 20 posts · 0 votes
18y
I'm finding that lenders consider the sales price (even discounted) when you pay cash for a property and then try to refinance to "cash out" and hold it with no money down. So effectively, if you buy a $250k appraised home for $175k, they treat it like a $175k purchase and expect you to put in 20% of $175k when you refinance. I'm not seeing deals right now where lenders are willing to take the new appraisal amount and issue a loan based on that number. Where in the last month have you seen this? Thanks.
Wentzville/St. Louis, MO · Member since 2008 · 359 posts · 1 vote
18y
Thanks for sharing your findings. That is a shame that you were not able to use a no seasoning option.
Any lender underwriting to Fannie Mae guidelines should be able to do a no seasoning cash out refinance whether it was from an all cash purchase or refi of an existing purchase money loan. Some lenders choose to limit their exposure by not doing them. You need to find a source that specializes in investment loans so they can do these loans for you rather than telling you how tell your broker how to get them done. Much could be lost in translation which ultimately may lead to the loan process getting messed up.