Australian investor - looking for cash out from existing prop

Sydney, NSW · Member since 2014 · 12 posts · 0 votes

Hi All,

Quick background;

I own a property (single family home) in Kansas City, MO, I paid $42,000 USD for the property, settled Jan 2017

The property is owned outright with no debt, thus I’m exploring financing options (private/non conventional) to secure against this property in order to fund my next property purchase.

The next purchase will range from 25-30K USD, and will be in Kansas city.

What type of options are available?

Kind regards,

Stevan

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Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

right there in KC is Peak talk to JP Souer

we also do this for many foreigners. WE LOVE AUSSIE borrowers.. but these are non recourse loans you will not find a bank to make those low loan amounts on a rental to a foreigner. they require PG

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MJ S.
Investor · Shawnee Mission, KS · Member since 2014 · 77 posts · 54 votes
9y
@Stevan Adzic- What loan term are you requesting? Is there a reason you aren't considering conventional? There are a number of banks in Kansas City (or at least in the Midwest) that may offer you similar or better rates than a private lender for this type of situation, assuming that the numbers work, of course.
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Sebastien Hitier
Rental Property Investor · Hong Kong, Hong Kong Island · Member since 2014 · 188 posts · 114 votes
9y
Hi @Stevan Adzic if you are a foreign investor (not resident in the US), then we are in similar situation. I did some research and most banks lending to foreign investors will lend between 50%-65% LTV and not below 75k loan amount.
In general, lenders don't like houses at this price point because once the SHTF and the borrower vanishes, the lender intended recourse would be to unload these at distressed price to a wholesaler. There is not much borrower protection in these deals.
I am also shopping for foreign investor mortgage. You can PM me and I'll let you know how it goes.
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Andrew SyriosPro Member
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Residential Real Estate Investor · Kansas City, MO · Member since 2014 · 10k+ posts · 5k+ votes
9y
With very cheap properties, I think the best way to get them financed is to bundle them into small portfolios and then approach a local bank with them. Preferably, these properties shouldn't be in warzones of course. If you have a good relationship with a bank, they might lend on a small one by itself. But most banks would rather lend more than $30,000 at a time, thus bundling them together can help.
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George Taylor
Wholesaler · Myrtle Beach, SC · Member since 2017 · 276 posts · 80 votes
9y
Also another thing to consider with being a foreign investor not residing in the US, if you have an LLC that's formed here in the specific state you own property in then it shouldn't be an issue. As far as the properties under $75k, it's difficult to find lenders but they're out there, usually have a minimum fee that they'll charge instead of a normal point fee schedule. You can message me if you'd like to further into details. @Sebastien Hitier @Stevan Adzic
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
9y
right there in KC is Peak talk to JP Souer
we also do this for many foreigners. WE LOVE AUSSIE borrowers.. but these are non recourse loans you will not find a bank to make those low loan amounts on a rental to a foreigner. they require PG
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Phil Shearcroft
Rental Property Investor · Kansas City, MO · Member since 2019 · 44 posts · 24 votes
7y
@Andrew Syrios hi! Just scrolling through comments and perhaps you could elaborate on being able to do this? I have 4 Dayton, Ohio properties that I own outright that all produce good cash flow and would love to hear about this bundling idea.
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Andrew SyriosPro Member
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Residential Real Estate Investor · Kansas City, MO · Member since 2014 · 10k+ posts · 5k+ votes
7y
Originally posted by @Phil Shearcroft:

@Andrew Syrios hi! Just scrolling through comments and perhaps you could elaborate on being able to do this? I have 4 Dayton, Ohio properties that I own outright that all produce good cash flow and would love to hear about this bundling idea.
It's rather simple, you just ask to get a loan on all four at the same time. You will want to ask the bank for spearate releases so you can sell or refinance one without the loan being due. They will usually accept this but want you to pay a little more off the principal (say pay 110% of the principal for that property based on what percentage of the entire loan was assigned to that property; so say each property appraised for $40,000 and has a $30,000 loan, then they would want you to pay $33,000 off if you sold one of the properties).
When you talk to banks, just tell them you would like to borrow on all four. You could try one to start with and then if they say the value is too low, ask them if they would be willing to do four so they are lending more money. But we haven't had a problem just pitching portfolios to refinance all at the same time. Although usually only community banks are interested in such loans (or national companies that specialize in this like Lima One Capital, but they usually have minimum loan amounts of at least $50,000 and more often $75,000).
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