HELP! seeking long term mortgage solutions for investment houses

11 Replies

I'm seeking non-owner occupant, long term financing for my rental houses.

any advice or recommendations to secure financing that meets these criteria would be greatly appreciated!

The most critical part is either a) low minimum lending limits or b) the ability to bundle multiple houses together to meet the minimum lending limit

the LTV to be based on the ARV

the interest rate to not be more than 8-9%

it to be a long term financing solution, 5 year balloons are okay, portfolio loans are okay but preferably seeking 20-30 year non owner occupant mortgages on individual or multiple houses

PLEASE HELP!

Thanks in advance!!!

@Kayla Ross i would seek out a few good mortgage brokers in your area. Its best to use local mortgage advisers. A broker will have access to 10 or more banks that they can try to match to fit your needs. Here in the Pittsburgh market your terms are reasonable but the interest rate will be around 5%. Much lower than your 8-9% expectations.

the 8-9% is the max I would consider. the mortgage brokers' minimum lending limits are too high for what I'm looking at and they do not cater to investors by allowing the portfolio loans. the portfolio lenders I'm in contact with exclude loans in the area I invest in.

@Kayla Ross I think you’re issue is “LTV based on ARV” which I read as: “I want a mortgage for more than the purchase price but less than the ARV!” In essence, a no-money or negative-money down scenario. Maybe I’m wrong so you might want to walk us through your scenario in more detail.

If my posit is correct, that’s what HMLs are for. But 8%...well...hmmmmmmmm...start dialing the phone ;)

@Kayla Ross - There are many non-bank permanent lenders who will do blanket loans.  They all differ in their requirements: min # of properties in the loan, min property value, seasoning, FICO, etc....

More info would be needed to assess this.  But there may well be options that fit what you are looking for.  PM me if you want more details.

That's possible. We've used two lenders and I believe one of them offers rates from 5.975% up to 8.425% depending on credit score and the debt service ratio (Net Operating Income/Debt).  Can also do a 30 year and can do portfolios. The minimum value per property is usually $75k and loans can be from 60% to 80% of the value. Let me know if you'd like more info. 

visio lending might do this loan. They do bundle portfolio loans with relatively competitive rates, long amortization, full term loans.

Hey @Kayla Ross , a few questions, that perhaps if answered can get you some referrals:

  • Where are the properties you're looking to finance located? What's the area you invest in? 
  • By rental houses, do you mean vacation/air-bnb type rentals or rental properties with month to month or longer term tenants?
  • Generally, what are the purchase prices of the properties you're looking to buy at? 
  • What are the property types? Single family, 2-4 unit, townhomes, condos, etc..

Depending on your FICO (and if you have any judgments/foreclosures/bankruptcies) you may have a decent amount of options. The only thing that may hold things up a little is that most lenders in the non-bank space will require a minimum loan amount of anywhere between $65K-$100K.

andrew:

not quite no-money/negative money down.

I'm looking to buy a house for $8-10,000 and put a few thousand into it. The house will now appraise out somewhere in the $20,000's.

The house is bought and paid for in cash but I would like to now borrow 70-80% of the appraised value to restore the cash I used so I can buy another house.

or I would like to do this with 3-5 houses and then group them together and pull the equity from the package to free up my cash to acquire more.

I don't want hard money loans I put tenant in them on annual leases and then hold the houses long term.

Ryan,

I'm aware the different blanket loan lenders but the ones I find all need a $75,000 minimum per property and like I said these are $20,000 houses.

Annette,

the value per property is what's killing me. If they would let me put 4-5 houses together to reach the $75,000 I would be great but the houses aren't worth that.

George,

I invest in Toledo, Ohio 

In the 43605 zip code

purchase price around $10,000

They're single family homes.

FICO and credit are great 

I'm perfectly happy to borrow $65-$1000K but I need them to allow me to bundle multiple homes in that loan bc no single house in this area will appraise out at those amounts. 

If I can put 4-5 houses in that loan I can reach those appraisal amounts.

The concept is good, however......

Honestly, those numbers are just too small. Very simply, if the loan goes bad, it's virtually a guaranteed loss for the lender.

Any house with a value under 45k is extremely hard for an investor to get financing on. (Private Lenders are possible)

Sometimes you can get one or two done in that range. (it's more likely if the borrower has strong financials)

@Kayla Ross

It's important to read for comprehension on your post.

I think you're asking for a rehab loan.  If you have done these before, I would go to my previous lender because you have a track record and see if they'll give you the terms you're looking for.  I don't know what you mean by "low minimum lending limits".  Are you talking about credit score, loan size or ltv?  

If they won't then others probably won't either. Visio won't do long term financing based on ARV at that rate nor will Lima One, Lending One or Lending Home. Lima One will go down the lowest of that list for loan sizes (45K minimum I believe).
 

You could get your rehab financing done and refinance for long term once the properties are stabilized.  

Stephanie

Stephanie Potter the reading comprehension comment was ill aimed. 

I want to purchase a fixer upper with cash

I want to rehab said house with cash

After rehab is complete and a tenant, under an annual lease is in place, I would like to borrow money against the house to replace the cash that I have spent acquiring the house and funding it's rehab.

I want this long term non-owner occupant mortgage to be based off of the houses ARV, or more technically, it's current state,. I don't want to borrow an amount based on the purchase price.

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