I am searching for a credit union that:
1-keeps their loans in house, no overlay on the number of loans
2- Preferably no seasoning required
3-Would lend in NJ
@Rigo V. 2 questions here:
- Any reason why a credit union only? What if a bank or lender had those features, would that be ok?
- Have you posted this in the New Jersey forum? If you are looking for a specific lender in that state it might be a good idea to ask in that state forum here on Bigger Pockets. It would open more options if you didn't limit yourself to Credit Unions...but you may have a reason for asking specifically for one.
Tag me and let me know what you think. Thanks!
@Andrew Postell thanks for the reply. Lender would be ok, just trying to find someone that can grow with my business and is willing to be flexible as I grow.
I did post in the NJ forum but don't think I'll get much of a reply unfortunately.
@Rigo V. ok cool. And some state forums are better than others but maybe try to repost with just Looking for lender that does X. That might open it up some. I'll PM you here but a couple of pointers (in case others are curious about this subject too):
- Keeping loans in house is entirely possible. I'm totally ok with this being a requirement from you.
- No limit on the number of loans - in general, this limit is from Fannie Mae and Freddie Mac. In general, but let me explain this first. Conventional, conforming loans (Fannie/Freddie) don't come from the banks. It comes from the agencies. So Freddie's loan limit is 6 and Fannie's is 10 (you can go higher than 10 if you are buying your own home). When we go outside of Fannie and Freddie that means that you will receive "Portfolio" loans. Or loans that come from the bank's own portfolio of money. So in theory, NO limit on these loans. I am describing this because usually investors talk about using small banks. And small banks don't have unlimited funds. Now you may never hit the limit that a small bank has...but I have certainly seen very successful people tap a small bank's entire portfolio to it's max....or at least the maximum that the bank feels comfortable with lending. My point is, all banks have some type of limit. You may never reach it, but it is there. So most investors try to have 3 or 4 lenders in their network for this reason. It takes time to find good investor friendly lenders. Probably networking with REI groups in your area. Speaking with the Loan Officers at banks and asking them about other banks. Talking with Mortgage Brokers (people who represent multiple banks) and so forth. Long explanation here but I hope this helps.
- Seasoning - what type of seasoning are you looking to avoid specifically? Is this being able to use rental income immediately seasoning or pulling cash out seasoning? Or some other type of seasoning?
Here to help so tag me in your response and I will make sure to keep answering. Thanks!
@Andrew Postell thanks! I am hoping to avoid the fannie limit of 10 which i think is certainly possible with the right lender.
As for seasoning I am hoping to avoid having to wait 6 months after a rehab to pull out my initial cash outlay.
@Rigo V. Ok, these answers helps for sure.
For the "receiving cash back" I wrote a pretty lengthy article about this subject and how to properly structure a cash purchase. If you already know all the restrictions then just pay attention to the 3rd section on how to actually do it. You can find the article HERE
I'll PM you on the lender recommendation. Thanks!
@Rigo V. I've used Credit Union of NJ (CUNJ) for a HELOC. They are located in Ewing, NJ. I've spoken to their commercial lending dept. regarding portfolio lending and will be refinancing some properties with them shortly. They meet all of your criteria. Best of luck
PM me if you'd like some more info on lenders that will let you refi up to 75% of your investment properties on an individual basis. Cross collateralizing a loan against a portfolio will severely limit your flexibility going forward. If you want to sell one of the properties, you'll have to restructure or refi the whole loan.