If you're not doing this already, when a potential lender declines due to the low loan amount, ask them if they know anyone who might make that sort of loan. Don't just say "thanks" and hang up. I recently did something similar and spoke to over 15 institutions before being referred to a bank that would make the loan.
Sounds like time is of the essence, so you may want to have someone else help make the calls while you're working. Texas is a big state. Lots of options. If they get a hold of a lender who will consider the deal, they can send you that lender's contact info. Just a thought.
Try Embrace Home Loans,
2 years ago, I financed a 55k rental property in Baltimore City using them. They are a national lender.
30 year conventional mortgage at 4.75%.
Send me a PM and I can give you the name of the loan officer I used. (Great guy and can close any loan)
@Garrett Fulton Thats exactly what I'm looking for. Can you pm me their contact info as well?
Have you tried to post the deal at BP Marketplace?
Maybe there'll be some private money lenders on the site interested in funding your long term note.
I recommend the BRRR strategy. Look for other properties with better equity. If you can get a refinance loan for 80% then you can pay more then me for property. :)
I would look for off market FSBO or wholesalers. Just make sure you know the area well and don't over pay. Even if you bought a property at 75%ARV you could come out of pocket less then the 20K.
Also, the 5% doesn't sound bad to me. Will you share what bank offered that to you?
If you need any more help feel free to reach out. I will help you any way I can.
It is refreshing to see @Jay Hinrichs getting so many votes with his 2k idea. 2k over 30 years is an irrelevant amount of money but I have seen many investors kill deals over that amount, AND LESS! Do that to your agent once or twice and suddenly your agent is very hard to get ahold of.
@Kelton Johnson here are 3 lenders from 3 different banks who will lend in the sub 50k space. They do most of the 50 states but I can't guarantee they all will do Texas but it should be a good start for you on your search for sub 50k lenders.
Larry Heydon, Citizens Bank
Ken Kopp, VanDyk Mortgage
@Jerry Padilla , MB Financial Bank
find a small local bank that'll do 80% of total cost and get them to roll your $10k construction costs to improve the property in. Will solve both your problems and you will come out ahead property value and cash flow wise
Originally posted by @Charlie Fitzgerald :
I like the 15 year deal a lot better. I also do not recommend pulling HELOCs on personal property to buy business purpose rentals real estate and if you tell the banks you are doing that, they don't either. Keep your personal assets separate.
Thats what i have mu HELOC for , the last 2 deals I did , settlement was in 7 days . No time to do the bank or loan thing . They were great deals that needed work and woudnt qualify for a loan . Bought fast , rehabbed just as fast , refinanced and paid off HELOC in 3 months both times . Its a great tool
Originally posted by @Kelton Johnson :
Yeah the best I heard was 20% down @ 3.375% for a 15 year term, 3k closing costs, and no escrow. Do you like that better than 20-25% down @ 4.25-4.5% for a 30 year term? It eats away about $100 in cashflow but still leaves me around $200 or so a month and obviously helps a ton with equity.
Finally, a person in here quoting realistic interest rates! I keep hearing online (I know most internet quotes are bogus but I'm sure you've heard this too): "Oh, you can get a 3.75%" And, I will say, the week I went under contract that is not what I got.
I buy my properties through a commercial lender, but they are residential properties. Try checking them out? I've financed as little as $18k through them.
That's a good point. If that is a factor I would suggest finding a crowdfunding portal that can provide proof of funds for the purchase of the property in advance of the actual crowdfunding.