All Forum Posts by: Aaron Byrne

That is not my experience. Whenever we complete a "mail-away" close where the buyer or seller is out of state relative to the subject property, the party who needs to sign meets with a notary in their respective area, not a notary local to the county in which the subject property resides. There are many nuances between counties, so I would encourage you to enlist the help of a local title company in Indiana and ask them this question. They are your friend. As a general answer based off my personal experience, I recently closed a transaction for a property in Marion County, Indiana where the buyer lived and signed docs in Hawaii. The title company recorded the docs without issue, even though our documents contained the seal from a notary public in Hawaii.

Hope that helps!

I believe Legal Zoom provides registered agent services in Wyoming. If you have not explored them thus far, I would encourage you to consider them as a possible option. I do not have personal experience working with them, but clients of mine have successfully utilized Legal Zoom before to form an LLC in other states.

While a HELOC may be permitted on investment properties in general, lenders vary on their willingness to make those loans. As a HELOC is typically in addition to an exiting first lien, the combined LTV on the home may be greater than what a lender might be comfortable with. Plus, since you do not live in the property, that creates more risk to the lender and their requirements may be stricter or the cause them to simply not make HELOC loans on investment properties at all. Also, same with minimum loan amounts, there is no set minimum for a HELOC. It more has to do with your willingness to do what it takes to meet the lender's requirements and the lender's willingness to make the loan based on their internal guidelines.

I agree with Robin. As a lender myself, having an opposing LE to review helps solidify the conditions/terms you presently have and determine if our products might be a better fit.

Origination fees are certainly different when compared between lenders. Essentially, that is the fee which compensates the lender for making the loan. This fee may be higher or lower for a number of reasons, one of which includes if there are any "junk fees" charged by the lender like an inflated processing or underwriting fees.

As to a cap, it depends on the type of loan. For example, qualified mortgages have a 3% cap on fees charged by the lender for loan amounts under 100,000.

From what I have been hearing/seeing, conventional rates have ballooned and thus a 4.8% rate on a bank statement loan sounds attractive. I assume that rate was not locked which is why the bank came back with a higher rate of 7.2% which strikes me as being a bit high, but without knowing more details, it is difficult to form any educated opinions in regards to the rate/fees being high/low.

At the end of the day however, you are not locked into any specific financing until loan consummation, so do not hesitate to explore other options. Should you discover this offer is competitive, you can always circle back at that time, but be conscious of any rate locks or potential adjustments that may occur if you delay on moving forward while shopping other lenders.

One element to think about when choosing the state in which to domicile your LLC is the tax ramifications. For example, say that organizing in PA requires you to register as a foreign entity in MO which costs you more initially, but the tax treatment in PA will save you money in the long run as you scale your portfolio. I am not a tax expert and on the surface creating an entity in MO as recommended above seems practical/reasonable. Nevertheless, I wanted to chime in and broach the subject of tax treatment to hopefully encourage you to explore that element of the decision before ultimately deciding on a path.

If they are asking for their fee upfront, I would take that as a red flag. Typically, except for something like an appraisal fee or credit report, the lender's fee is paid at closing/loan consummation. I have not worked with Allen Financial Services before, but if their terms look too good to be true and they are asking for a 2% processing fee paid up front, I would move forward with extreme caution and start looking for another lender as it is questionable if these folks are legitimate. 

There are certainly lenders who will permit appraisals to occur prior to the home being rented. I would recommend that you look into private/hard money space as those lenders are less concerned about that dynamic and more open to working through scenarios like the one described above. Good luck!

Is this 160k loan a second lien? That may also play a role in those higher fees. Nevertheless, I agree with the previous advice given. You are not locked into specific financing until loan consummation, so do not hesitate to explore other options. Should you discover this offer is competitive, you can always circle back at that time, but be conscious of any rate locks or potential adjustments that may occur if you delay on moving forward while shopping other lenders.

Another pro to a drive-by appraisal is that it may be cheaper cost-wise verses an interior inspection. On the flipside, another con is that the appraiser would be going off public data, so if any of that information is outdated/inaccurate, it may negatively impact value. Good luck!