@Derek Walvoord pull a list of every bank and credit union in your local area. Call the business lending department and ask about: seasoning requirements, LTV, lending to entity versus person.
What is the problem with 6 months seasoning? To do a rehab, place a tenant, and have them pay a couple months 6 months is not very long.
@Steve L. . Not necessarily a problem, and tenants are already signed up. I want to be able to do a solid cash out so I can move on to the next thing. I wonder if there has been a rule change or something. I was able to do this in the past.
As we know, every refi is a little different!
Originally posted by @Derek Walvoord :
I am trying to BRRRR and I am getting stuck on the refi part. I used LendingHome, a hard money lender, to do the rehab. They make you initial close in an LLC. For the post rehab/rented out/taking cash out part, lenders want to close in my personal name. Not really a problem, but I am running into seasoning issues. Wells Fargo will apparently do HELOC's for investors, but will only use the post-rehab/new value after 12 months. TD Bank will perhaps do it, but I don't think they service Chicago. Huntington Bank is having a hard time going from LLC to personal (which they require) for less than 6 months seasoning.
Anybody have an out here? What am I missing?
I would be happy with either a cash-out refi or a HELOC.
As many times as I've done this, I've always bought the property in the name of an LLC and:
1 - had to refi it in either my name or a credit partner's personal name, and...
2 - wait for 6 months for seasoning
@Joe Villeneuve - I may have a local bank that will do a HELOC. They just need to have me transfer the property into my own name - basically be personally on title. They claim there is no six-month seasoning for this product. We will see. Thanks!
I've been able to get lines of credit to purchase property at 5.25%, 20 year amortization, interest only payments from a local bank in my market, and "cash-out" refi as soon as tenants are in place, with no seasoning period. Usually it takes me 30-45 days to get a property fixed and have a tenant in place.
The key is LOCAL bank. Local banks work with other investors in your market. They will know your property manager if you have a good one. They will know the value of the property... and they know if it will rent well. They also do all of their underwriting in house. It's not easy to find this, but go look! Cold call a bunch and see who's got the best lending package. Don't ask about the credit line over the phone. I've experienced that they withhold their best terms for investors they feel they can have a successful ongoing relationship with.
Now my banker was more inclined to give me the business LOC to purchase property because I our business shows a substantial revenue from property sales.. this might have warmed them up to me. But try. Get a list of every single one in your market and put on a shirt and slacks. Shine your shoes too... and bring a set of PNL's or pro-formas at least.
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