I am at a point where I think I have used up the extent of my "easy" traditional financing. I have 5 doors cash-flowing $1k per month of relatively passive income and I'm working on tying up an SFR that should bring in another $100-$200 per month.
Things have been cruising along very nicely, but I fear my operation will be coming to a grinding halt. My boss basically told me that my job is being eliminated soon which is going to kill my relationship with the banks. I have to age my duplex another 5 months before I can pull equity out of it and I'll have to do the SFR. Combined I think I'll potentially have around $80k to play with and dump into 2 more multi's, but I won't be able to pull it out or qualify for any kind of loan if I don't have a permanent job.
Further more I am looking to switch industries to get into property management or something similar in real estate.
My real question is this: If I can land a permanent PM job, how long will it be before a bank will count me as someone they can lend to again? OR do I need the permanent job to pull out the equity in the first place? If not I may just jump right into flipping/rehabbing properties with the $80K as soon as I can get it out.
Let me know what you guys would do. What options are available that I'm missing?
I work in the mortgage dept of a big bank. typically you need to show 2 years employment history. If you can find a job before you lose your current job that would be best. You don't need any breaks in your employment. Also most lenders will only lend you money up too 3 deals.
I would suggest networking to find private money lenders. These are everyday people in your area that want to make 7-12% on their money depending on what kind of deal you are looking to do. For flips you usually pay 12% with a guarantee of 6 months interest. for rentals/long term holds you can offer them as little as 6-7%. Thats way better than what a bank will pay them to hold their money.
Worst case scenario you could use a hard money lender but then your looking at 20% interest which won't work for a long term hold.
I would network your local Realestate Investors Club and start asking around about private lenders.
Small banks/credit unions will consider your job status if you stay in the same industry as well but a major switch is a big flag and you'll be waiting a bit. Some require a few months pay stubs, a contract, or depending on your situation a few years of tax returns.
I would honestly ask around and tell them your situation. I would be prepared to give specific information about your rental success but because of the short time period since the first acquisition I'm guessing you'll have a hard time using that as a source of income.
@Gualter Amarelo - I switched jobs mid loan and it wasn't that big of a deal because it was the same industry. But what was interesting is I am in sales and have been paid base + commission/bonus for 10 years. My last job called it a bonus and my new job called it a commission so when I went to get my last loan they could only use 75% of my commission because I did not have 2 years history of getting one.
I think I am going to have to take the advice of seeking out smaller banks and credit unions in order to get the properties refinanced once they have been aged for the 6 months.
I guess I will a always have the option of getting seller financing also. Maybe I can pull a Brandon turner and get someone to do seller financing on a 24 unit!!!
I'm thinking that necessity is going to drive me to find a way! I will keep
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