BiggerPockets

I have a 154 unit apt under contract in Dallas. I had an approval and LOI from Wash Fed through a broker at BMC Capital. Terms were ok. I was only asking for 65% loan and got approval at 6.25 %, for first 5 years and an AUTOMATIC renewal for another 5 years at 6.875. 30 yr amort 1 point. I was pretty happy. Last week, Wash Fed pulled the plug on TX loans except for Class A(almost new), and this loan disappeared, after sending appraisal fee and money to lock the rate.
BMC found a new deal out of First Bank in ILL. 25 year amort, 6.75%, 5 year call, and 1 and half points. Not very good, but maybe ok. The LOI was FIVE pages long and a bunch of blank spaces like "buyer must maintain same financial net worth during loan and have X amount in liquid assets at all times. These spaces were blank. Upon further review, the assets were ok but they wanted liquid funds Stocks, mutual funds or cash in the amount of THREE MILLION DOLLARS at all times during the loan!! Why would ANYONE borrow the 3 mil and then leave 3 million in liquidity?
The property is $4,325,000 and the 65% loan was under 3 million, yet they wanted liquidity of 3 mill!! Does any of that make sense. If it drops below that level during loan, they may call the loan. I felt like contacting them and asking what stocks I should buy. I almost question if they're really lending or scamming. Anyone that had taken a loan like this a year ago, with the market loss, they'd now be in default!!
I ask again, are lenders REALLY making loans??? Rich.

I was all excited that someone had replied to my post, then I realized that Corey had accidentally hit the enter button 3 times. I've always said in speeches and seminars that imo, lenders are dumb as dirt!! Now, maybe even more so. Rich.

I'm sorry, was having some internet issues that day. It didn't show as having posted on my end so I refreshed lol...

Lenders are getting so conservative it's not even funny. A few months ago when I was shopping for a car, I gave up on financing after several banks told me I needed to have 6 months of "continuous employment." But, I do, I said. Apparently now if you change companies, you're starting at zero again, even if you took a better position at a new company with a higher salary! Ridiculous! And we're only talking about a 10k loan here... which is secured because they can take the car back... my credit score was around 700 at the time... I truly couldn't believe it.

A few years back I worked at a mortgage company, and they were throwing money at people by the bagful. People who worked retail jobs and had credit scores in the low 600's would get 100% financing. Back then, IndyMac Bank was really generous, what a surprise they were one of the first to go belly up.

I'm just getting tired of paying for other peoples' mistakes... I'm sorry but it's not MY fault that a bunch of idiots got themselves qualified for homes they can't possibly afford to own and now they're defaulting on the loans. Nor is it my fault that the banks foolishly agreed to loan to them.

I just called and asked her about your deal. She said it probably was the fact that you are out of state. Washington Federal does not like out of state borrowers.

My husband and I invest in commercial real estate and are experienced and solvent. Even so, we have had lenders pull out after issuing LOIs to us. This had been extremely frustrating as lending terms were changing while we were in the middle of trying to close a deal. We happened across an intermediary for the group of investors that I now represent. We were so impressed with them that I went through training and am now working as an intermediary consultant for them. I highly recommend this group of private investors and they lend in most industries not just real estate.

We are no longer going through banks for our deals. We can get higher LTV, get funded in any city or state, and still have decent interest rates if the deals make sense. We are thrilled with these private investors. [SOLICITATION REMOVED]

Kyle,
Why not share the name of the lender you're using? Others would love to find what you have apparently found. Rich

When we flip properties, its either through a local (small) bank or through a private/hard money lender. The big guys just can't take the risk.

Ha ha! Now that's funny!

Rich,

I feel your pain. I'm getting so tired of risk averse sissies in this industry. Appraisers, lenders, investors unwilling to do their job an put it on the line a little and yet still expecting big profits. 3 MIL liquidity... what a joke.

We need to put together the big boys real estat group. Only those willing to work hard to find and manage good deals allowed. Must be willing to bet on good risks.

You want safety and security then go get a government job.

Justin

This thread I started a long time ago. I have a more recent follow up called bringing lenders to their knees. I was successful on bluffing them. Check it out, Rich