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Private Lending & Conventional Mortgage Advice

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Aaron Leger
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Loan Options Advice

Aaron Leger
Posted Apr 28 2022, 18:57

Hi all,


Currently working on flip #2 and renting a cheap apartment. Working towards buying multi families. Should have some decent cash after flip 2 (250k). Working a 1099 day job and doing okay. Was wondering what some loan options are that would be okay with my 1099 job W/O 2 years tax returns. Some decent places in my price range and geographic range and it kills me to watch them come and go. Wanna get into something while I finish my flip. I won the flip house out right, and though I need about 100k to finish, it’s all debt free. Advice please :)

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David Malik
  • Memphis, TN
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David Malik
  • Memphis, TN
Replied Apr 29 2022, 07:09

For most of my lenders, you are inexperienced until you do three in three yrs. It means you will not get the best rates. In addition, the reqs for multi usually have a higher min before they would fund. They go by a per unit amount and the price depends on whether it is 4 & below units or 5+. 

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Erik Estrada
Lender
#2 Private Lending & Conventional Mortgage Advice Contributor
  • Lender
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Erik Estrada
Lender
#2 Private Lending & Conventional Mortgage Advice Contributor
  • Lender
Replied Apr 29 2022, 11:54

How much are you looking to buy the property for? How many units? And what are the market rents per unit?  Work history shouldn't be an issue as long as the property cash flows well. 

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Givo Aghasi
  • Lender
  • Los Angeles, CA
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Givo Aghasi
  • Lender
  • Los Angeles, CA
Replied Apr 29 2022, 12:07

Work history/ Personal income shouldn't be an issue. There is lending options that are more asset based and don't require tax returns. These lenders care more about experience and LTV, usually can go up to 75% of purchase price or appraised value if subject property is income producing @Aaron Leger 

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Jacob Trogan
  • Lender
  • Kansas City, MO
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Jacob Trogan
  • Lender
  • Kansas City, MO
Replied Apr 29 2022, 12:19
Quote from @Aaron Leger:

Hi all,


Currently working on flip #2 and renting a cheap apartment. Working towards buying multi families. Should have some decent cash after flip 2 (250k). Working a 1099 day job and doing okay. Was wondering what some loan options are that would be okay with my 1099 job W/O 2 years tax returns. Some decent places in my price range and geographic range and it kills me to watch them come and go. Wanna get into something while I finish my flip. I won the flip house out right, and though I need about 100k to finish, it’s all debt free. Advice please :)


Bank statement loans. Reach out for contacts I can point you to. As far as your flips good job as a HML I tell people this is a great way to build capital!

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Jacob Trogan
  • Lender
  • Kansas City, MO
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Jacob Trogan
  • Lender
  • Kansas City, MO
Replied Apr 29 2022, 12:35

Also depending on your location we can give you the 100k if you have no other liens on the property. If you are not in KC look into a local hard money lender and they could probably do something similar

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Aaron Leger
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Aaron Leger
Replied May 2 2022, 06:02

The place is 300k and does cash flow and has room for rent increases of at least 25%. I would owner occupy it, preferably, not sure if that helps or hurts me? I have nothing to put down as I’m still working on flip 2. 

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Holly Frongillo
Pro Member
  • Real Estate Agent
  • Whitinsville, MA
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Holly Frongillo
Pro Member
  • Real Estate Agent
  • Whitinsville, MA
Replied May 14 2022, 12:01

A hard money lender or a lender who frequently does construction loans would be the direction I would personally go on this, assuming you are going with the BRRRR method for the multi family purchase. I am renovating my first flip now using a construction loan and it's working wonderfully. I also work with a couple of different investors who have gotten private money / hard money loans on their original purchase of a multi they have used BRRRR on.

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Mike Klarman
  • Specialist
  • New Jersey
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Mike Klarman
  • Specialist
  • New Jersey
Replied May 17 2022, 08:20

Look at Hard Money Lenders. You have 2 flips, if you have a real estate license or contractor's license then that would often count as a point. Once you get to 3 points of exp then the product really opens up for you. You'll get 90% toward purchase and 100% of rehab. Loans most times can't exceed 75% of the ARV.

Get in good at a Hard Money Lender.  Really vet your loan officer.  Are they responsive?  Eager to help? I've seen loans hang around for 2 months because the loan officer is lazy.  A good loan officer will never have anyone waiting on them.  The Loan Officer is the go between for the Underwriting Team and the Borrower and it is key not to stop the flow.  Some Loan officers have documents sitting in their email for days holding things up.