Short answer, yes there are banks like that. I had to call about a dozen lenders before I found one who didn’t have seasoning requirements. Keep calling :)
Mine ended up being local, but I did also call national brands. Most of the big guys do have seasoning requirements so your best bet is probably local!
@Greg Soon my lender did a delayed finance, where they covered up to 100% of purchase price, capped at 75% of appraisal. This wouldn't cover any renovation costs, of course, so depending on how much work is needed it might not be a good option. PM me if you want a referral, I believe he does loans everywhere in the US.
Thanks Rivy. Your description is also my understanding. however the lender I worked with insisted that he can only do the 75% of the lower of purchase price and appraisal.
@Greg Soon people love to overcomplicate stuff lol. Make a list of local banks in the market where your property is located, and inquire and portfolio loans. If the property is far from you, they will prefer you have a local property management company with a track record.
Lots of local banks will not be happy about financing a property in a manner that gives you all of your cash back. 6 months seasoning gets you into a loan product where you can get a favorable appraisal. You wouldn't be waiting that long anyways if you have to renovate the property, anyway.. unless it's a very light job.
About creating a loan through your LLC.. who's the mortgagor holding the promissory note? Your LLC? Which I would presume means you're funding the property too. Which is no different than you financing personally. If you're referring to getting a business loan through your LLC to purchase the inventory- I don't think any bank is going to want to do that for you unless your business has a history of income generation and creditworthiness.
I say wait the 6 months. BRRR's are really as scalable as everyyyyyone on BP thinks anyways lol.
@Greg Soon people love to overcomplicate stuff lol. Make a list of local banks in the market where your property is located, and inquire and portfolio loans. If the property is far from you, they will prefer you have a local property management company with a track record.
Lots of local banks will not be happy about financing a property in a manner that gives you all of your cash back. 6 months seasoning gets you into a loan product where you can get a favorable appraisal. You wouldn't be waiting that long anyways if you have to renovate the property, anyway.. unless it's a very light job.
About creating a loan through your LLC.. who's the mortgagor holding the promissory note? Your LLC? Which I would presume means you're funding the property too. Which is no different than you financing personally. If you're referring to getting a business loan through your LLC to purchase the inventory- I don't think any bank is going to want to do that for you unless your business has a history of income generation and creditworthiness.
I say wait the 6 months. BRRR's are really as scalable as everyyyyyone on BP thinks anyways lol.
Thanks Elliott for your thoughts. In my case I need to evict the previous owner and then do some repair/renovation, depending on how well/bad the house is left after eviction, since this is for renting so I will not do major renovation if I do not have to. So I could be ready for refinance in one months or longer, possibly longer than 6. In case the best scenario happens then I do like to get the money out for the next deal. Delayed financing would help to at least get some money back.
It appears that applying for a bank loan to pay of an existing loan is *not* the same thing as applying for a bank loan against a personally financed property, even if the existing loan is from an LLC that you own. I've never actually done it, so I can't personally vouch but @Andrew Postell definitely knows what he's talking about.
Hi Rivy, I was following Andrea's thread but have not figured out the details.
Any loan backed by Freddie mac, ellie mae, Fannie Mae, will require at least 6 month seasoning. If you paid cash, or have a non-agency backed loan you can refinance as soon as renovations are complete.
Any loan backed by Freddie mac, ellie mae, Fannie Mae, will require at least 6 month seasoning. If you paid cash, or have a non-agency backed loan you can refinance as soon as renovations are complete.
You mean if I paid cash then I can only a non-agency backed loan within 6 months, right?
Any loan backed by Freddie mac, ellie mae, Fannie Mae, will require at least 6 month seasoning. If you paid cash, or have a non-agency backed loan you can refinance as soon as renovations are complete.
You mean if I paid cash then I can only a non-agency backed loan within 6 months, right?
If you pay cash you can get any loan you want (except for owner occupied loans, if its strictly investment property).
@Greg Soon Delayed Financing is an agency back loan by Fannie Mae, so no the 6 months does not apply which the whole reason people look into this option.
You could also just look into a portfolio loan that allows you to pull out 75-85% of new value with little to no seasoning instead.
@Jason D. that is good to know! So how would I put repair costs on the HUD? Would it have to be escrowed to ensure that it's used strictly for repairs? Who manages that?
@Rivy S. thanks for that link! Looked it over, sounds a lot like mortgage fraud. I'm no lawyer though.
Creating an entity solely owned by the same individual who is the mortgagee of the property in order to bypass FNMA seasoning guidelines sounds pretty shaky in a legal world intent and form are considered over formality and function.
Once again- Didn't go to law school, but I wouldn't advise any of my buyers use this method when purchasing a property from me.
In addition- I'm not sure the result of doing this would be any different than delayed financing.