I purchased my first Triplex 3 months ago in cash, rehabbed and have all units rented currently. I bank with a small local bank and they offered me 60% LTV for a cash out investment with no seasoning requirements under the LLC with me personally guaranteeing it.
From what I remember browsing through the posts a few months back there were some reputable lenders online who were offering 70-80% LTV in this scenario which I can not seem to find.
I thought provident was one of them but could not find any information in their guidelines to back that up. If anyone has any suggestions, I know that this would be a portfolio product.
I was looking to get a 70-75% LTV if possible.
@Dan M. I would just call around to banks in your area that has 20 or less branches and ask for the VP or commercial lending. This move would yield you some relationships(a bonus) for your future deals as well!
If you utilize fannie mae's delayed financing program you can get a maximum of 70% cash out, assuming you fall under all of the delayed financing criteria.
Delayed Financing Exception
Borrowers who purchased the subject property within the past six months (measured from the
date on which the property was purchased to the disbursement date of the new mortgage loan)
are eligible for a cash-out refinance if all of the following requirements are met.
1. The original purchase transaction is documented by a HUD-1 Settlement Statement,
which confirms that no mortgage financing was used to obtain the subject property.
(A recorded trustee's deed [or similar alternative] confirming the amount paid by the
grantee to trustee may be substituted for a HUD-1 if a HUD-1 was not provided to the
purchaser at time of sale.)
2. The preliminary title search or report must confirm that there are no existing liens on
the subject property.
3. The sources of funds for the purchase transaction are documented (such as bank
statements, personal loan documents, or a HELOC on another property).
If the source of funds used to acquire the property was an unsecured loan or a loan
secured by an asset other than the subject property (such as a HELOC secured by
another property), the HUD-1 for the refinance transaction must reflect that all cashout
proceeds be used to pay down, if applicable, the loan (unsecured or secured by an
asset other than the subject property) used to purchase the property. Any payments on
the balance remaining from the original loan must be included in the debt-to-income
ratio calculation for the refinance transaction.
Note: Funds received as gifts and used to purchase the property may not be
reimbursed with proceeds of the new mortgage loan.
4. The new loan amount can be no more than the actual documented amount of the
borrower's initial investment in purchasing the property plus the financing of closing
costs, prepaid fees, and points on the new mortgage loan (subject to the maximum
LTV/CLTV/HCLTV ratios for the transaction).
5. All other cash-out refinance eligibility requirements are met and cash-out pricing is
Note: Investor and second home borrowers with five to ten financed properties are
ineligible for cash-out refinance transactions unless all of the delayed financing exception
requirements listed above are met. Additional restrictions apply. See B2-2-03, Multiple
Financed Properties for the Same Borrower.
6. The original purchase transaction was an arms-length transaction.
I must have spoken to 20 banks in my area and not one would touch the loan. Looks like I will be sticking with my bank and a 60% LTV.
@Jesse Gonzalez Thanks for the detailed Fannie guidelines but this is not a Fannie product being that its an LLC.
If you have a minimum loan of 500k, there are dozens of lenders that will go 70% LTP (Loan to purchase) the next day. If it has been over 3 months since purchase and some upgrades have been made, they will go 70% of ARV. Once you get up to 500k loan value, it frees up a lot of restrictions given by local and "big box" lenders. Good Luck!
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