A Seasoning work-around?
My Situation:
I purchased a duplex with a business credit line and will be paying for the rehab costs from my business account. (Technically I contracted my company to do the work, a theme for another discussion.) While the total rehab will take 3 months or less, I'd like to get this property on its own loan, so as to free my credit line back up for other potential deals I may find. Certainly the most frustrating part of the BRRR method! While most, if not all banks now require a seasoning or waiting period of at least 6 months, this can hamper deal flow, and seem like an eternity in the real estate game. So how can I, or you, shake this apple loose from the tree so to speak? Well here's a theory floated by one of my bank loan officers.
Since I used business funds (business Credit Line) to purchase the property, technically the business can record a mortgage on the property. To do this I have to go to the county recorder's office and file a Promissory note and record it with the office, much like a traditional mortgage. After dong this, my lending institution of choice will now disregard the seasoning period because now there is a mortgage on the property and they look at this as a re-fi, in essence my bank is able to "steal" away a mortgage from another lending institution,(e.g. my business in this case) so they don't care how long the property has been owned.
I'd like to hear thoughts from the community on this.
Has anyone done this and is it a legit workaround?
Thanks!