Met with a commercial lender today

2 Replies

I met with a commercial lender to see if I could put together a line of credit collateralized by the properties I already have.  He said he could do it, but I would be refinancing my cheap 30yr mortgages into shorter 15yrs, and they would adjust every 5yrs.  Not to mention the points and other costs involved.  

So, thank you; but no.  

What I gathered from the conversation was that I should probably get a little more equity in my primary residence, then I could secure a HELOC on that and THEN go shopping for new rentals.

The goal of all this was to get into a position where I could buy a midrange house for cash, then refi into a 30yr mortgage.  

Next steps:

1.  Find a lender that will lend me money based on the appraised value. 

2.  Find deals that will appraise for at least 20% more than my purchase price.  

Any thoughts?

@Carter Melvin maybe Im missing something but isn't ordering an appraisal one of the first things a lender does? Did this bank use some other criteria to determine how much your property was worth and how much you could borrow? You should be able to get a 25 year loan on a commercial property. 

I don't think my post was clear.  I have 3 residential rental properties and my plan was to take the equity that has appreciated above my purchase price and use it to buy another residential house cash.  He said a number of times that most banks would be shy to do this b/c of getting burned a few years ago, but I know Wells Fargo will do it, I just haven't talked with them yet.  He also said his bank is a smaller bank (they don't do residential mortgages anymore).  There are plenty of banks in the area, moving on to the next one.  

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