All Forum Posts by: Aaron Pfeffer

You will more than likely spin your wheels. Bring in a partner with some money who can help supplement a larger down payment to get the loan you really need.

Just out of curiosity, who is funding the two in Pensacola you currently have in process and why are they not an option to fund the next two?

It's an interesting time to talk about Subject To...

There will be more interest in them moving forward if/when the market softens and recession hits, but what will the banks do this time around if they aren't inundated with bad debt like they were in 2008? Meaning...

If someone with a 3.5% 30 year mortgage sells their home Subject To, but the going interest rate could be 6% at that time, will the banks trigger the alienation clause in their note or will they just be happy to keep receiving the 3.5% money?

No such thing as a hard money loan to complete construction on a primary residence. You can do a hard money loan on a primary residence as long as the money is clearly being used for a business purpose, but hard money is not bailout money for a homeowner. And that's what this sounds like she needs. Sorry to paint it clearly...but it sounds like your friend has to take the loss here and sell to someone willing to take the project off her hands. And if you do find a private beneficiary willing to make the loan to her to complete the project? Don't take it...for her sake and for the beneficiary's.

This is more common than you think, so yes, you can do both. Mostly...

It's a loan officer who does some realty transactions here and there. Much less likely to be a real estate agent who also funds loans from time to time. 

You really have two things going on here, and they should be tackled one at a time:

1. LLC entity, or any other business entity for that matter -- a DSCR loan is your option. Conventional banks (large or small) don't want to be lending to an entity, only an individual. However, most DSCR lenders will also want the guarantor of said entity to be U.S. Citizen or have an ITIN. Which brings us to...

2. If you have no SSN, ITIN, or trade lines (credit history), your options are even further limited to an even smaller group of DSCR lenders who will lend to you. You either have to source that lender yourself (they definitely exist), or utilize a broker to source them for you.

Hi, feel free to DM me to discuss.

May I ask how you received a $3.5 Million approval from the bank? I'm assuming you showed them $1.5 Million in down payment from some source of funds of yours, not to mention some other source of funds to not only debt service the $3.5 Million for some period of time that bank requires, but to also cover all costs of closing on that loan from that same source. Or did you just get a pre-qual/pre-approval for that $3.5 Million? Because if it was full approval, why not close on the deal using that source of funds that proved your were loan worthy?

Otherwise, what you are really looking for is a partner. For someone to be in second position with you and gap finance what will bring this deal to 100% financing, you need a JV partner. No lender (hard, private, conventional or otherwise) is going to loan you $1.5 Million in second position at 100% CLTV if they have zero cushioning in equity. Unless this is a value add play where you are renovating before you get better leases and long term financing? And even then, no bridge lender will give you 100% CLTV financing. 90% total project cost (maybe 95% if you are extremely seasoned and have long standing relationship with bridge lender), but that's about it.

Depends what your LTV is, but it sounds like the rate is in line these days for 40 year I.O. for DSCR. But also...you need to know what the cost is? What is the brokerage channel charging you and are they being paid from YSP on that rate or charging you points or both?

Yep, this one is clean and easy. Simply put you can be a renter, have no other mortgages, and get yourself a rental property or vacation home with the correct financing on that home, ultimately utilizing the rental income to help offset your DTI. But you will have to get a full doc Fannie Mae/Freddie Mac conventional loan. DSCR wants you owning (or being spouse and living in an owned) primary residence.