Lender that will fund at LTV of Appraised Value

[Ori Skloot]

Hi Everyone,

I am evaluating an opportunity to purchase some residential properties in Richmond CA as a bulk sale. 6 single family dwelling and 2 duplexes.  I'm thinking that getting a loan on each property will be a headache, but maybe not.  I've talked to a few lenders so far.   One declined, one said they could provide a loan on each property, and one can offer a blanket loan.  The terms I'm finding out there are around this:

Term	5-Year/10-Year FIXED
Amort	30 Year
Rate %	From low 5% and up
LTV	Up to 75%
Min. DSCR	1.2x
Yield Maintenance	54 months/114 months

The issue I'm finding is that all of them will loan at a 70-75% LTV of the appraised amount or purchase price, which ever is lower. It will be a large purchase price for me and I would rather not sink 30% cash into the deal. I've seen posts on BP of people managing to put much less down on bigger deals like this (aside from seller financing as the seller is not interested).

I also don't love the long yield maintenance period. 

Can anyone point me to a lender in the Bay Area (or elsewhere) that could loan a larger amount of while still having good terms?

Finally, a lot of people talk about going and talking to a local bank or credit union.  Any specific names people could offer that are in the Bay Area, preferably near Berkeley?

Thanks for the help!

Ori

[Chris Mason]

Best you are realistically likely to get from any fannie/freddie lender is...

• Rates in the mid to high 4s, 30 year fixed.
• 8 concurrent closings on 8 residential 30 year fixed loans. 
• 8 purchase contracts.
• 8 simultaneous escrows.
• 8 individual appraisals. 
• LTV based on lesser of appraised value or contract price, just as you say. The way you game this is to juice up individual sales amounts on each individual discrete contract. Once you have all eight appraisals in, negotiate prices downward from there to arrive at your "real" bulk/net sales prices. This will let you put the net equity of those that come in at the 'high' value to work offsetting those that come in at the 'low' value. We will view it as 8 discrete escrows, but there's nothing stopping you on the phone with the seller from discussing/negotiating it as one bulk deal -- ie: he gives up 3% on that one that appraised low, you give up 3% on this other one that appraised at the juiced up contract price.
• This is going to sound unusual, but considering what a monumental task eight at once would be it might make sense -- if you/seller have the flexibility -- to try doing this in Dec/Jan timeframe. Pushing deals like this through isn't 1 * 8 = 8 times as much work for the loan originator.... more like 8 * 8 = 64 times as much work. If you want to do it during the hot Bay Area summer in Real Estate, I'm going to suggest planning on a 60 day close (telling you what you need to know here, not what you want to hear).