Portfolio lending 10% down
bethel, CT · Member since 2015 · 335 posts · 57 votes
Is it possible to get a 10% down loan from a portfolio lender non owner occupied with great credit?
@Ryan Keenan it's entirely possible for a portfolio loan to have a 10% down option. A portfolio loan is a bank's own "portfolio" of money. So the bank's board of directors calls the shots on lending their own money. In theory, they can lend money on whatever they want. But while it is possible I will say that it is unlikely. So you may have to call ALL the banks in your area...which is a somewhat regular event if you become a successful investor anyway. Private money might be your best option for truly fulfilling a 10% down scenario.
Even if it is, I reckon it shouldn't be! Are all parties involved just LOOKING for trouble?...
I'm not trying to break any laws here just asking if they are available . Recently went to one and he told me I could get a non owner occupied single family for 10 percent down which made me question it.
I'm not trying to break any laws here just asking if they are available . Recently went to one and he told me I could get a non owner occupied single family for 10 percent down which made me question it.
If so, then get a full list of terms and conditions. Most of us would suspect that the person to whom you are talking isn't really listening - - NON-OWNER OCCUPIED?
I'm not trying to break any laws here just asking if they are available . Recently went to one and he told me I could get a non owner occupied single family for 10 percent down which made me question it.
I believe Fannie Mae has a product that will let you buy SINGLE family units for 15% down (not 10%), though probably at a significantly higher interest rate than their normal conforming loans.
My earlier comment wasn't questioning the LEGALITY of 10% down for non-o-o, just the SANITY!
@Ryan Keenan it's entirely possible for a portfolio loan to have a 10% down option. A portfolio loan is a bank's own "portfolio" of money. So the bank's board of directors calls the shots on lending their own money. In theory, they can lend money on whatever they want. But while it is possible I will say that it is unlikely. So you may have to call ALL the banks in your area...which is a somewhat regular event if you become a successful investor anyway. Private money might be your best option for truly fulfilling a 10% down scenario.
I'm not trying to break any laws here just asking if they are available . Recently went to one and he told me I could get a non owner occupied single family for 10 percent down which made me question it.
I believe Fannie Mae has a product that will let you buy SINGLE family units for 15% down (not 10%), though probably at a significantly higher interest rate than their normal conforming loans.
My earlier comment wasn't questioning the LEGALITY of 10% down for non-o-o, just the SANITY!
Thanks for your response, what do you mean by the sanity?
@Ryan Keenan our portfolio lender, a regional small local bank, needs 20% down, but they WILL let it be 10% my funds and 10% second loan from a private lender etc.... We have not used this option yet, but might be on an upcoming purchase we have out eyes on.
The comment about is correct to my experience - these are often 'in house loans' and the local bank board are the ones who decide what to do.
As a side note, we used the Bigger Pocket Rental Property Calculator to present all out numbers and our lender said he seldom gets such thorough analysis coming across his desk :-).
Dan Dietz
I'm not trying to break any laws here just asking if they are available . Recently went to one and he told me I could get a non owner occupied single family for 10 percent down which made me question it.
I believe Fannie Mae has a product that will let you buy SINGLE family units for 15% down (not 10%), though probably at a significantly higher interest rate than their normal conforming loans.
My earlier comment wasn't questioning the LEGALITY of 10% down for non-o-o, just the SANITY!
Thanks for your response, what do you mean by the sanity?
I mean: Do you REALLY want to be leveraged at 90% if/when values go down by 25%?
And I mean: Do Lenders REALLY want to have lent out more than the assets are then worth?...
I buy with 10% down with my bank, portfolio lender... so long as their max LTV is 70%
@Ryan Keenan, ignore my above posts, IF you too can get it done like @Austin Fruechting!...
@Ryan Keenan, my above posts can be ignored, IF you too can get it done like @Austin Fruechting!
You make your money when you buy!!! Or at least I do, haha!
I buy with 10% down with my bank, portfolio lender... so long as their max LTV is 70%
Are you saying make sure you buy at 70% of what the property is worth? Or am i not understanding?
Thanks
@Ryan Keenan - If something appraises for $200k, my bank will lend up to $140k, so long as I'm putting a minimum 10% of purchase price down.
So if I buy it at $155k - I put $15,500 down, they lend $139,500
If I'm buy at $160k - I have to put $20k down since $140k is max loan.
If I buy really well they will roll closing in as well. Say I get it at $150k and there's $5k in closing for $155k total, they'll roll the closing costs in. So again I put $15,500 down and they'd finance $139,500 and I don't have to pay for any closing costs.
They'll do the same for as improved. They will appraise it as if the work is done and lend 70% of that value with minimum 10% down of everything again. That 70% can include carry, closing, rehab, and purchase. So say I buy something for $600k and I need $180k for rehab, carry, & closing. $780k total all in. If it appraises for $1mil as improved, they'll lend up to $700k so I just need $80k up front for everything.
@Ryan Keenan - If something appraises for $200k, my bank will lend up to $140k, so long as I'm putting a minimum 10% of purchase price down.
So if I buy it at $155k - I put $15,500 down, they lend $139,500
If I'm buy at $160k - I have to put $20k down since $140k is max loan.
If I buy really well they will roll closing in as well. Say I get it at $150k and there's $5k in closing for $155k total, they'll roll the closing costs in. So again I put $15,500 down and they'd finance $139,500 and I don't have to pay for any closing costs.
They'll do the same for as improved. They will appraise it as if the work is done and lend 70% of that value with minimum 10% down of everything again. That 70% can include carry, closing, rehab, and purchase. So say I buy something for $600k and I need $180k for rehab, carry, & closing. $780k total all in. If it appraises for $1mil as improved, they'll lend up to $700k so I just need $80k up front for everything.
I see what your saying just alittle confused on the purchase. What's the best way to know what it will appraise for before you buy/ make an offer? I've read offer 70 to 75% of the list price and you won't go wrong.
Thanks
@Ryan Keenan - If something appraises for $200k, my bank will lend up to $140k, so long as I'm putting a minimum 10% of purchase price down.
So if I buy it at $155k - I put $15,500 down, they lend $139,500
If I'm buy at $160k - I have to put $20k down since $140k is max loan.
If I buy really well they will roll closing in as well. Say I get it at $150k and there's $5k in closing for $155k total, they'll roll the closing costs in. So again I put $15,500 down and they'd finance $139,500 and I don't have to pay for any closing costs.
They'll do the same for as improved. They will appraise it as if the work is done and lend 70% of that value with minimum 10% down of everything again. That 70% can include carry, closing, rehab, and purchase. So say I buy something for $600k and I need $180k for rehab, carry, & closing. $780k total all in. If it appraises for $1mil as improved, they'll lend up to $700k so I just need $80k up front for everything.
I see what your saying just alittle confused on the purchase. What's the best way to know what it will appraise for before you buy/ make an offer? I've read offer 70 to 75% of the list price and you won't go wrong.
Thanks
I can't tell you exactly how to know it for the properties you are looking at in your market. Practice and experience. I know my market well enough and have done enough deals to estimate fairly accurately for any property I'm looking at... a combination of having looked at hundreds of properties over the past 7 years and having purchased over 50 of those individual properties.
If it's listed near appraisal or ARV, offering way below asking is probably going to make it tough to get a deal, especially in today's market. I wait for something that is listed at an ok deal, then try to make it a great deal, or go for off market.
I am incredibly patient while waiting for the right deal, and then incredibly aggressive to pounce when it's there. I am the tortoise then the hare. I have spent nearly a year looking once in the middle of my career when I was ready to buy. And I have put a set of 3 duplexes under contract before other people even got their email notification that they had been listed, even when I wasn't certain where the down payment was going to come from. Macro patience, micro speed. Especially in today's market. Wait for the right deal, and when it's there you have to move fast as possible.
@Ryan Keenan - If something appraises for $200k, my bank will lend up to $140k, so long as I'm putting a minimum 10% of purchase price down.
So if I buy it at $155k - I put $15,500 down, they lend $139,500
If I'm buy at $160k - I have to put $20k down since $140k is max loan.
If I buy really well they will roll closing in as well. Say I get it at $150k and there's $5k in closing for $155k total, they'll roll the closing costs in. So again I put $15,500 down and they'd finance $139,500 and I don't have to pay for any closing costs.
They'll do the same for as improved. They will appraise it as if the work is done and lend 70% of that value with minimum 10% down of everything again. That 70% can include carry, closing, rehab, and purchase. So say I buy something for $600k and I need $180k for rehab, carry, & closing. $780k total all in. If it appraises for $1mil as improved, they'll lend up to $700k so I just need $80k up front for everything.
I see what your saying just alittle confused on the purchase. What's the best way to know what it will appraise for before you buy/ make an offer? I've read offer 70 to 75% of the list price and you won't go wrong.
Thanks
I can't tell you exactly how to know it for the properties you are looking at in your market. Practice and experience. I know my market well enough and have done enough deals to estimate fairly accurately for any property I'm looking at... a combination of having looked at hundreds of properties over the past 7 years and having purchased over 50 of those individual properties.
If it's listed near appraisal or ARV, offering way below asking is probably going to make it tough to get a deal, especially in today's market. I wait for something that is listed at an ok deal, then try to make it a great deal, or go for off market.
I am incredibly patient while waiting for the right deal, and then incredibly aggressive to pounce when it's there. I am the tortoise then the hare. I have spent nearly a year looking before when I was ready to buy. And I have put a set of 3 duplexes under contract before other people even got their email notification that they had been listed, even when I wasn't certain where the down payment was going to come from. Macro patience, micro speed. Especially in today's market. Wait for the right deal, and when it's there you have to move fast as possible.
Thank you for your insight , really appreciate it.!