Connections to Portfolio Lenders?

[Eliza Sparks]

Hello! My husband and I are active real estate investors and both left our corporate jobs in the last two years. Since we haven't been doing this for 2 years, we won't qualify for a conventional mortgage. We're starting to strategize how to make our next move/buy our next property, and I'm wondering if anyone has a connection to someone who would originate a mortgage from a bank statement? Any other ideas or strategies that have worked for others in this situation, aside from seller finance or creative financing directly with the seller?

[Issac San Miguel]

Quote from @Eliza Sparks:

Hello! My husband and I are active real estate investors and both left our corporate jobs in the last two years. Since we haven't been doing this for 2 years, we won't qualify for a conventional mortgage. We're starting to strategize how to make our next move/buy our next property, and I'm wondering if anyone has a connection to someone who would originate a mortgage from a bank statement? Any other ideas or strategies that have worked for others in this situation, aside from seller finance or creative financing directly with the seller?

 Hey Eliza!

Hard money lenders lend on the asset. It is very light doc, no tax returns, no required length of time showing income. 

Your liquidity and assets are considered. 

I would be happy to answer any additional questions you may have. 

[Miranda Holland]

There are Private lending companies that will do portfolio loans but they can be hard to find at times especially for properties that are valued under 100k. Private Money/ Hard money lenders don't really care about your work history and many of them set the bar pretty low when it comes to credit scores.  

[Ryan Hastings]

Lima One Capital may be a good option, I’ve never completed a loan with them, but I’ve chatted with a gentleman from there and they do asset based lending, much easier to get a loan approved as long as the deal is profitable and you can demonstrate reasonable past experience with similar properties. 

[Matthew Crivelli]

Would be happy to take a look at any upcoming projects! @Eliza Sparks

[Nick Belsky]

@Eliza Sparks

Please clarify, are you looking for financing for a primary residence or an investment property?

If looking at investments, bank statement isn't really a great option. DSCR is far superior and won't require work history either. There is really no reason to choose bank statement over DSCR, I can't think of a single good argument.

For primary, bank statement is a viable option.  Lenders vary greatly in their guidelines so working with a mortgage broker who understands your scenario and finances will be key to finding the right lender and program.  If you have assets, asset depletion loans is another possibility.

Cheers!

[Bobby Feinman]

@Eliza Sparks

Hi Eliza. LOVE Colorado! I have a son that lives in Denver and I am out there several times a year to ski. Happy to answer any questions you may have!

Bobby

[Keith Anderson]

CIVIC, Cost Fund, Merchants Mortgage, Lead Funding, Phoenix Loans

[Eliza Sparks]

Sorry I should have clarified in the original post, this is in fact for financing our next primary residence. Hard money won't work on this one, we use that route on some of our flip projects though.

We're looking to qualify for our primary with bank statements. Trying to see who might do these loans with good long term financing.

@Nick Belsky I've never heard of asset depletion loans, can you tell me more? 

Thank you for all the responses! 

[Issac San Miguel]

Quote from @Eliza Sparks:

Sorry I should have clarified in the original post, this is in fact for financing our next primary residence. Hard money won't work on this one, we use that route on some of our flip projects though.

We're looking to qualify for our primary with bank statements. Trying to see who might do these loans with good long term financing.

@Nick Belsky I've never heard of asset depletion loans, can you tell me more? 

Thank you for all the responses! 

 A good non qm broker should be able to help you out! 

[Nick Belsky]

@Eliza Sparks

Rates are significantly higher than usual right now. I had a few that quoted out in the 8s just this week, but they were only putting 10% down. Going to 15-20% down would have brought those rates into the 6-7's. Bank Statement loans will typically not go over 90LTV and the lenders will hit your rate hard for going that high on LTV. 30, even 40 year, loan terms are not difficult to come by on bank statement loans.

Asset Depletion is a different animal and most lenders will require 20-25% to qualify. Essentially, these are similar in structure to a bank statement loan except that we use your assets and a depletion ratio to determine your monthly qualifying income. This income is used to calculate DTI. E.g. Let's say you have $1,000,000 in liquid assets (IRA, 401k, Cash, Crypto, etc...). Each lender has different rules about how much of your balance for each type of liquid asset you have they will accept, but for demonstrative purposes let's assume 100%. Then based on the depletion factor the lender offers (usually 60, 90, 120, etc... months) they will divide your qualified assets by that amount. So $1MM/60 = $16,666 in monthly qualifying income will be used to calculate your DTI. Obviously, the impact of higher ratios will reduce the amount of qualifying income calculated, so be aware of which ratio the lender is using. Some lenders even allow you to use other forms of income to add to your assets such as 1099 or other income, some do not.

No Pre-Payment Penalties and no Mortgage Insurance on either of these loan types, even if you are over 80LTV.  They are Non-QM and not regulated by TRID, Fannie/Freddie, or any other agency.  Most lenders do tend to follow Fannie guidelines though.  Any mortgage broker who works with Non-QM should be able to help you with either of these loan types.

Hope that helps.

Cheers!

[Zach Wain]

@Eliza Sparks - Nick was pretty spot on. But I will add a twist. Yes, there are bank statement loans for 12 and 24 months that have decent terms (better than hard money). DSCR loans that just need to cash flow, but fairly high rates. The best option, better than asset depletion, is Trust distributions.

Like asset depletion, you need to have a good amount of cash to do this.  We have 1 lender that allows us to do this, the vast majority of lenders have not heard of this or can not do it.  But, if you have or open a Living Trust and put a chunk of assets into a savings/brokerage account owned by the Trust, than you can take a monthly distribution from the trust and we can use that as income.  Best of all, its a conventional loan which means it will be the lowest rates available on the market.  If that works for you, that is by far the best terms possible.

If you have any follow up questions, let me know.  Good luck!

[Jeremy Holden]

@Eliza Sparks Im an investor and agent down in metro phoenix who utilizes @Grant Schroeder's portfolio program for myself and clients. He licensed in a basket of states including CO and AZ. Give the man a holler

[Kerry Baird]

Since it is an owner occupant house, you cannot get a mortgage with any of the DSCR folks I've used. Non QM is the way forward.

[Elliot Sun]

Anyone know of good Denver based lenders for single family home purchases (primary, investor) as well as smaller multi-family 2-4 unit projects? Please send any locally based you recommend! Thanks

[Chris Lopez]

@Eliza Sparks Connect with Travis Sperr at Renovo. I'll DM his detials. He's a local Denver investor and has some great options for DSCR loans. He's helped a few clients. I've worked with him for years. Great lender and person