Coventional Financing without Junk Fees

[Chad Maxwell]

I am looking to purchase a couple home in Texas over the next 60 days. Both I expect to purchase under ARV. BRRRR one of them and live in the other. Can anyone offer some advice on what banks have no junk fees and a good process for getting loans closed? I have used NFCU in the past and had a decent experience. They are less knowledgeable on investment loans though, so my second property loan is more of my concern.

[Andrew Postell]

@Chad Maxwell thanks for posting.  Always good to meet a fellow Texan here.  Bigger Pockets also has a pretty active Texas forum as well if you ever want to post there too.  Some pretty good locals monitor there as well.

And as mentioned above, Investment Property loans generally aren't worked by most banks very often so it is hard to find an "investor friendly" lender....some of us would be willing to take an "investment KNOWLEDGEABLE lender" at least.  Those are hard to find as well.

And the answer to your question is it just depends on how you are acquiring your properties. If you are buying them off the MLS...then a lot of banks can do that reasonably efficiently. But if you are buying off market, using BRRRR, neeing to refinance out in under 6 months, etc. then that will narrow the bandwidth quite a bit. Just mentioning BRRRR might have some going cross-eyed. And this isn't just a "Texas" thing. Lots of investors have these same issues in every state. So I created a list of questions you should be asking your lenders when you interview them. That is, these are the questions you need to ask if you are BRRRR off market properties. I'm always open for a phone call if you want to discuss but here's what I would suggest you ask your potentials:

Questions for Lenders

1. When do you start using rental income to help me qualify? (the answer needs to be immediately)
2. When do you start using “After Repair Value” on my property? (this had better be immediately too)
3. How long do you need me to be on title to refinance? (this is important if you do need a short term loan to purchase then refinance out - and the answer should be 1 day...very important that it is 1 day on title is all that is needed to refinance)
4. What is my minimum down payment required? (if they only require 15% down on a single family home that is usually a good sign that you are working with a flexible lender)
5. How many loans can I have with you?
6. Can I change title to my LLC?
7. Do you sell your mortgages?
8. What is your loan minimum?
9. Can you explain to me what your reserve requirements are?

And thanks for the mention @Chris Mason.  Greatly appreciated!