Private Lending & Conventional Mortgage Advice

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Marcus Geiser
  • Investor
  • Pittsburgh, PA
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Frustrated: Find Deals and the money is the easy part, NOT.

Marcus Geiser
  • Investor
  • Pittsburgh, PA
Posted Jul 1 2022, 21:45

It seems every lender I have tried to deal with conventional wont work credit is not good enough. Working on it... Close.

I own my home. No Mortgage.

I own a Duplex that needs $40K renovation for $90,000 ARV Renting at $750 per side $1500 month. Aliquippa, repository property.

Good income, $5000 working capital, but the renovation will stall self funding to the tune of a couple grand a month. 

I also have another property under contract for $55K, $30K Reno, $125 ARV in a great school district, perfect flip or turn key for buy and hold. New Roof.

I also have a commitment to purchase a home on the same street that is nicest on the street, maybe cosmetic updates, well maintained. 

I could really use some direction, currently working on projects in Aliquippa, PA.

Pittsburgh, Pennsylvania

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Chris Seveney#2 House Hacking Contributor
  • Investor
  • Northern Virginia
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Chris Seveney#2 House Hacking Contributor
  • Investor
  • Northern Virginia
Replied Jul 2 2022, 04:27

@Marcus Geiser

Have you bought on private lenders and possibly give up some equity?

Why is your credit poor? If it's because you have defaulted on payments in the past it will make it much more difficult to get financing especially on NOO property.

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Replied Jul 2 2022, 05:59

How are you able to buy the properties if you can't get loans? Aside from your own home, you own a duplex, have another property under contract and want to buy a 4th property. You could look for a short term partner and then buy them out after 1-2 years. If you own your own home, can you do a HELOC to cover some of the reno costs on the property under contract and then flip that?

Sometimes we can find great properties, but we don't have the money to buy all of them.

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Erik Browning
  • Lender
  • CA AZ TX
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Erik Browning
  • Lender
  • CA AZ TX
Replied Jul 2 2022, 07:11

@Marcus Geiser to really understand your situation, we’d have to know more details.

What did your lender say is your max qualification with <50% DTI?

Do you lack the necessary reserves for the product they are offering?

Are you working with a bank/Credit Union or a broker?

What is the nature of your derogatories?

Do you have enough liquid capital?

Is the property actually overpriced?

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Andrew Postell#2 BRRRR - Buy, Rehab, Rent, Refinance, Repeat Contributor
  • Lender
  • Fort Worth, TX
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Andrew Postell#2 BRRRR - Buy, Rehab, Rent, Refinance, Repeat Contributor
  • Lender
  • Fort Worth, TX
Replied Jul 5 2022, 12:34

@Marcus Geiser Obviously you can hustle.  You wouldn't have properties if you weren't a good worker.  I know several investors that also are good workers but just have terrible credit - they are always struggling.  They are making a living...but struggling.  Imagine what you could do if your credit WAS good?  So take your credit as a test.  I don't mean this in the wrong way - things happen - but you are being tested.  Right now.  When you own 200 homes, that's 200 property tax bills, 200 insurance bills, 200 property manager bills, and bills, and bills, bills, bills, bills, bills.  If you can't pass a test you will continue to retake that test.  So get that credit better.  Take this as a challenge...a challenge you can do.  Manage 20 bills correctly and you can get to 20,000.  I hope you don't mind me speaking this way but this is what I want to encourage you to do.  Hope all of that makes sense.

Lender Texas (#392627)

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Marcus Geiser
  • Investor
  • Pittsburgh, PA
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Marcus Geiser
  • Investor
  • Pittsburgh, PA
Replied Aug 7 2022, 18:09
I have no idea how private lenders work. Limited history on credit, thought credit cards were nice and got 12, Car, truck, DTI, just about have the credit figured out the hard way. Maybe 12 months and $25K, to repair and be mid 6oo. I have offered to give up equity to the point of offering the project and being the contractor. Scope of work ready, materials on quote at Home Depot. I would like to be an equity partner since I bring the deal, the rehab crew, the deed! It's a unique problem that has many solutions, finding good people to work with is tough. If I really over work myself for the next 6 weeks I can fund it all, and come back after a recharge trip and rehab it. I'll be laying down my hammer in a few months, a year. I'll either find a break or create my own.

Quote from @Chris Seveney:

@Marcus Geiser

Have you bought on private lenders and possibly give up some equity?

Why is your credit poor? If it's because you have defaulted on payments in the past it will make it much more difficult to get financing especially on NOO property.


User Stats

105
Posts
40
Votes
Marcus Geiser
  • Investor
  • Pittsburgh, PA
40
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105
Posts
Marcus Geiser
  • Investor
  • Pittsburgh, PA
Replied Aug 7 2022, 18:15
The duplex cost me less that $7000 or so. Impulse buy! Needs a full renovation, almost to studs. Will rent $650 per side, $1300 month. $35K reno.

#3 I bought for cash, cash I saved to rehab the duplex, but the deal is too good to pass. I now need to just file the deed. 

#4 is a home that I stumbled across in my daily routine. I clean up properties, I network with investors daily. We do a lot of clean outs. The REI often doesn't have a good person on the ground and I have a reputation for getting and address to the right buyer. I know how to run numbers, I locked it down for the people in my network that know what to do with it, hell I can wholesale it, release contract, for $1. As long as it keeps building relationships. She had someone else going out to look and had a number she was firm on. It was a look it up, obvious home run. 

Quote from @Theresa Harris:

How are you able to buy the properties if you can't get loans? Aside from your own home, you own a duplex, have another property under contract and want to buy a 4th property. You could look for a short term partner and then buy them out after 1-2 years. If you own your own home, can you do a HELOC to cover some of the reno costs on the property under contract and then flip that?

Sometimes we can find great properties, but we don't have the money to buy all of them.