After buying duplex with cash how can I refi to pay father back.

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After buying duplex with cash how can I refi to pay father back.

Account Closed
Rental Property Investor · Novi, MI · Member since 2018 · 10 posts · 0 votes
My dad and I are buying a duplex together but it was a cash only deal. So he put up all the cash to purchase the home on the idea that I buy it from him with an investment mortgage loan. We’ve run into a problem they won’t give me the loan bc it’s not a large enough purchase (86,000). My credit is great and I can put up 25%. We were thinking of getting a personal loan but I’m afraid of the interest on it.
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Kyle J.
Rental Property Investor · Northern, CA · Member since 2012 · 5k+ posts · 5k+ votes
7y

You can shop around and find another lender that can do smaller mortgages like this instead of going the personal loan route. It’s common for lenders to have minimum loan amounts (i.e. $50k, $75k); however, there are lenders out there that don’t have any minimum amounts. Just call around until you find one. 

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  • Kyle J.
    Rental Property Investor · Northern, CA · Member since 2012 · 5k+ posts · 5k+ votes
    7y

    You can shop around and find another lender that can do smaller mortgages like this instead of going the personal loan route. It’s common for lenders to have minimum loan amounts (i.e. $50k, $75k); however, there are lenders out there that don’t have any minimum amounts. Just call around until you find one. 

    4Reply
  • Craig Sloan
    Member since 2018 · 200 posts · 123 votes
    7y

    @Kyle J. is right on the money!  @Account Closed if you shop around you will find a loan.

    0Reply
  • Stephanie MedellinBusiness Member
    Mortgage Broker · CA · Member since 2014 · 1k+ posts · 644 votes
    7y

    @Account Closed  Sorry you're having trouble.  Have you found that you qualify in other ways (income, reserves, credit, etc), and are just not meeting the minimum loan amount?  

    A local broker should be able to get you a loan, whether conventional or portfolio.  With a value of $86,000 and 25% equity you'd be over $60,000 for your loan amount.

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    1Reply
  • Tim McClary
    Investor · Bangor, ME · Member since 2017 · 35 posts · 23 votes
    7y

    I'd recommend looking at the smallest local bank or credit union in your area that you can find. Some of the big guys like Wells Fargo or Bank of America might not have an appetite for a small loan.  The smaller banks and credit unions might charge you 0.5% or so higher than the larger banks, but they'll have the products you'll need.

    0Reply
  • Maurice D.
    Coppell, TX · Member since 2015 · 485 posts · 310 votes
    7y

    look for "delayed financing" programs , less seasoning than typical cash refi.

    1Reply
  • Andrew PostellPro Member
    Lender · Fort Worth, TX · Member since 2016 · 8k+ posts · 6k+ votes
    7y

    @Account Closed you have 2 items here to be aware of:

    • Banks don't make a lot of money on smaller loans (so many don't write them)
    • Buying with cash has a lot of rules to it (delayed financing, etc.)

    It might be hard to find a smaller lender in the area of the property so try to post on the Michigan forum to see if anyone can help with it.  I know of one lender up there so PM if you need some assistance.

    When buying with cash there are a lot of rules.  I wrote an post here on BP about it and how to properly structure your transaction.  You can read the post HERE

    Feel free to tag me with any questions.  Thanks!

    0Reply
  • Account Closed
    OP
    Rental Property Investor · Novi, MI · Member since 2018 · 10 posts · 0 votes
    7y
    @Stephanie Irto I’m calling around like everyone recommended. Thanks for the help
    0Reply
  • Account Closed
    OP
    Rental Property Investor · Novi, MI · Member since 2018 · 10 posts · 0 votes
    7y
    @Andrew Postell I really appreciate the help.
    0Reply
  • Eric Veronica
    Lender · Cleveland, OH · Member since 2011 · 588 posts · 439 votes
    7y

    @Account Closed $60,000 loan in Michigan usually doesn’t fail the points and fees test so I am very surprised you are having such an issue. 

    Your post raises a couple other questions however which you might want to clarify.  

    - Your post states “you and your father are purchasing a home together and that you will then buy it from your father”  but you can’t buy a property that you already own.  Do you mean that you are looking to pull cash out and give to your father so you both have an equal investment?

    - Timing - when did you close? When are you looking to cash out?

    - Title - are you both on title? Is the property titled in the name of an LLC? Is the LLC a 50/50 partnership with you and dad?

    These things may seem like splitting hairs to you but they can really impact the answers and the options that you are getting from lenders. 

    0Reply
  • Lance Petway
    Investor · Farmington Hills, MI · Member since 2015 · 97 posts · 22 votes
    7y

    @Account Closed I have a broker that I use for smaller deals out of Rochester Hills, Michigan. If you have not found anybody yet, let me know and I can refer her over to you.

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