Lender Increased Seasoning Period

4 Replies

Hey everyone!

I purchased my first property 2 months ago. Things have been going great so far. The tenant was already in place, rent was at market price and with zero rehab I have 50% equity. This property was purchased from another investor that was looking to get into storage units. I used a local bank with 20% down and was told 2-4 payments would be my seasoning period. I reached out to ask about using my equity to continue and his response was now 6 months for the seasoning.

I know this is not a get rich quick game and I am definitely learning from my mistakes but here is where I am at. I have started creating my team and systems so yesterday my realtor informed me of some listings that were not listed yet (coolest thing that’s happened so far) but I need to tap into that equity or look into hard money. So would it be unethical for me to go to another local bank and refinance/transfer the loan to them? Just need some advice on this and maybe some options. Thanks everyone and I look forward to the comments.

@Ron West there is nothing unethical about shopping lenders. Granted I prefer my clients didn’t so I can keep business, but sometimes I’m just not a good fit for everyone. If they can’t give you what they want then find someone who will.

What state are these properties in and what value?

Originally posted by @Ron West :

Hey everyone!

I purchased my first property 2 months ago. Things have been going great so far. The tenant was already in place, rent was at market price and with zero rehab I have 50% equity. This property was purchased from another investor that was looking to get into storage units. I used a local bank with 20% down and was told 2-4 payments would be my seasoning period. I reached out to ask about using my equity to continue and his response was now 6 months for the seasoning.

I know this is not a get rich quick game and I am definitely learning from my mistakes but here is where I am at. I have started creating my team and systems so yesterday my realtor informed me of some listings that were not listed yet (coolest thing that’s happened so far) but I need to tap into that equity or look into hard money. So would it be unethical for me to go to another local bank and refinance/transfer the loan to them? Just need some advice on this and maybe some options. Thanks everyone and I look forward to the comments.

There are portfolio lenders/brokers that will charge you more than a conventional loan, but won't make you wait the traditional minimum of 6 months (there are no seasoning 3 month seasoning options).  The conventional money is cheaper.  The portfolio money is faster.  Your call.

 

Thanks for the feedback! I have decided to reach out to some local portfolio lenders and see if I can work something out. It seems like either path is fine so we will see what happens. 

@Aaron K. Thanks! I want to get better clarity on the seasoning period from the next lender. The properties are C class but the numbers work and the BRRRR potential is there. The goal is to build my way up but currently I am just working with what I have.

@Nicholas Covington I do value building business relationships which is why its challenging for me to consider going with someone else but I think your right. If they can give me what I am looking for maybe someone else can. I am working in Southwest Georgia. We have a lot of smaller towns with property values from 40K to 200s. It really depends on what city you are dealing with and what school district in the bigger cities. I live here so it help with the market.

@Stephanie P. Thanks! For the home prices I am targeting a lot most conventional loans wont work with me. But the numbers still work on the portfolio loans and it is much faster.