We just set up our llc and tax id info. We are looking for a bank to use. We want a bank that is investor friendly to build a relationship with. Where do you guys like? 5/3rd looks decent so far.
Go with a community bank or credit union. 5/3rd is too large to take a chance on you.
5-10 branches max i would say.
Reason why I mentioned 5/3rd is out of the banks I have talked to they will do loans for as low as 35k for investment properties. I have a local CU that my wife and I use for our auto loans and banking but they actually said their loans aren't very good for investors.
I use the following banks:
BOFI Federal Bank
I have had my banking with several Credit Unions they are hit or miss, most people here say find a good local bank and try them. There was a podcast not too long ago that talked about how to build the relationship with the bank. I believe the guy on the podcast was a commercial bank underwriter. I am sure someone else can chime in and tell you what podcast it was, but I believe it was podcast 55 with Jimmy Moncrief. Basically I think the point of the podcast was how to get the bank to say yes but I believe he gave a bunch of really great tips on relationship building and presentation.
Hope this helps.
Seems like there are two schools of thought. Either local and small or more investor friendly. I had not heard of BOFI Federal but that looks interesting. Those of you guys that recommend PNC and TCF what have you used them for? Mortgages, lines of credit, checking/saving, or CC's?
Do you have Bank of the Ozarks there?
From my experience over the years.. I would start at a good local community bank and with a specific banker and then stay with that banker for life if you can.. I have 4 constants in my business... 1. banker ( same banker for 23 years) 2. Insurance agent ( same agent for 20 plus years) Accountant ( same accountant 20 plus years) Attorney (same attorney for 20 plus years).. Plus my accountant and banker are good friends and do a lot of business with each other... So when I do my compiled statements each year ( loan covenants) they fly right through.
As you walk before you run and have success your banker will then keep increasing your capacity. and then like what happened to many in 08 and 09.. those that banked with the big banks got the cold shoulder many small community banks ( if they did not go under) stuck by the core borrowers... This happened to me for sure.
then on the rebound my community bank gave me first look at all OREO and I bought 2 subdivisions with them that they financed at 100% including vertical and one financed the lots with Zero interest financing for 2 years.. Etc Etc Etc.
Big banks only function for me when I have to put money into my JV partners accounts all over the country. for that we use Wells or BOA.. but only for those reasons.
So at the end of the day and in this environment I can get bank financing at under 6% for all my deals.. and in my market here in Oregon many builders that got hurt have had to borrow hard money to build. so there holding cost are double or more than mine which creates flexibility with pricing and or more profit..
good luck you have lots of years ahead of you to create a good foundation and team
Thank you so much Mr. Hinrichs. That is excellent advice!
We use a local bank. It has only one location - no branches anywhere - but it has been in business for over 100 years. Their interest rates are a little higher than can be found some places, but they keep their loans in house and bend over backwards to keep from foreclosing if the owner is making an effort. We know the people there and they know us. They were willing to loan us $1000 for a home remodel 28 years ago when we barely had 2 nickels to rub together. They are an integral part of our community, and they act like it.
Unfortunately, you are unlikely to find a similar bank in Chesterfield.
@Sylvia B. you are correct. Most of the "small" banks around here have 5+ branches in Saint Louis.
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