Financing with 250k in equity, no income docs

8 Replies

I currently own 2 properties in AZ free and clear. I want to use the 250k in value to purchase a multi unit rental in Chicago, while keeping and renting my AZ properties. My income docs aren't there, is there a private deal I should consider, or a Portfolio loan? Should I quit claim my property to an LLC? Any advice will help. Thank you

I would get your income docs done. Are your taxes up to date. Tax returns are the main docs they will want.  If they aren't done, it is time to get them done. 

No one but a private lender is going to lend without returns. If you had a private lender you wouldn't be asking the question.

Hank,

There are ways to tap into the equity of your properties without providing income docs. Will you get the best interest rate going full doc? Most likely. But if that is simply not an option whether it's because your tax returns won't truly reflect your earnings (possibly due to heavy deductions/write-offs) or if you haven't filed in a few years and fear the tax penalties, then going an alternative route could be of tremendous benefit. It seems like you have your heart set on this multi-unit in Chicago so it wouldn't hurt to at least weigh out the options with your current scenario. 

Best regards,

Paul Marzolla

I would see if I could get a line of credit from a local bank on your AZ properties. They may have a problem w you investing the $ outside their lending area. They may not ask. Find local banks, make friends with the lenders, and have them teach you how to give them the answers they are looking for. I am having success w that.

Originally posted by @Hank McArdle :

I currently own 2 properties in AZ free and clear. I want to use the 250k in value to purchase a multi unit rental in Chicago, while keeping and renting my AZ properties. My income docs aren't there, is there a private deal I should consider, or a Portfolio loan? Should I quit claim my property to an LLC? Any advice will help. Thank you

Your properties (I'm assuming residential) should have been in an LLC from the beginning. They should not be owner occupied and cash flowing. Although you have no income to show are you able to show cash (seasoned) enough to support 6-9 months loan payments on the refi and purchase? (Let's use a round number at 5-7% of loan amt).

Standard Criteria 650+ FICO

@Hank McArdle , as you own the properties free and clear and you have no mortgages, I will just do my taxes, as the year end is coming soon,  refinance them with a local bank, or just go to a small bank to get a portfolio loan. This way you'll get the best interest rate possible and you'll lock the interest rate and with the cash, depending in what area you want to be, you'll want to go to a private bank in Chicago or the same you are refinancing your properties and take a 60 -65% loan also. The better quality neighborhood, the higher the rents. 

Good luck to you!

Originally posted by @Hank McArdle :

I currently own 2 properties in AZ free and clear. I want to use the 250k in value to purchase a multi unit rental in Chicago, while keeping and renting my AZ properties. My income docs aren't there, is there a private deal I should consider, or a Portfolio loan? Should I quit claim my property to an LLC? Any advice will help. Thank you

 If the properties are multi5+ or commerical (more than 4 units) then I can refer you to a lender that can help w/ this.  The lender recently did this for a client of ours in a similar situation.  If this is your situation send me a PM & I'll give you her contact info.

B2RFinance can handle situations like this, but be aware they often appraise low.