All Forum Posts by: Caroline Gerardo

Hard money only. 60% loan to value of the two properties BUT they will charge a fortune to release one property if if try to refinance or sell.  Short term loan with huge rate. 

Cross collateralizing ties the borrowers arms and legs- both must be non owner. Never going to meet High Cost/HOEPA laws/owner occupied federal and state regulations. 

No DSCR does this today- too small, cannot rent it at closing.

What is condition of both properties?

What escrow/title company includes rehab costs in the settlement statement? Who are you paying the rehab funds to out of escrow? A settlement statement summarizes costs owed by or credits due to the buyer and seller. 

You want to pay a contractor out of the closing, this is not a construction loan??? You would never want to give a contractor all the money upfront.

70% LTV is maximum for a Fannie or Freddie delayed financing refinance and the lower of the confirmed settlement statement or appraisal is used. Full documentation with your IRS taxes (do you have 2023 ready to file?) Because we are so close to filing deadline for IRS you need 2021 2022 and profit /loss for 2023-2024 year to date. Do a 30 year loan no buy down and hold until things improve, try to get as close to no points as possible.

75% LTV for NonQM again the lower of the two numbers. You won't find points lower than 1.75% here and often a prepay or buy out of the prepay upfront.

What condition is it in? To do the above two it needs to be inhabitable.

No you cannot get 100% of settlement plus rehab in the first year. Those are poof gone.

I'm guessing your purchase price is $150000- 180000? It also has to cash flow with rental survey. So say you are $180000 with  loan of $126000 piti $1180 it should rent for $700 a unit??? would work. 

It would be FAR far cheaper to do one loan not two. Make positive certain you can qualify for the second part of your plan, you need a preapproved permanent loan Fannie/Freddie/NonQM if you use hard money or a alt-temporary loan.

You are not going to arrange a meet or tell him. I would have the Ohio lien release forms filled out ready to be signed in my coat, a notary lined up to verify his driver license (your lender has a gal who will wait in her car at 6:30 AM for $125). You have his home address? You know what type of truck he drives? Showing up with the hot cheese melting in the burrito and a smile, no argument, no accusations ~ assume the best of him and act with kind heart (big stick in coat). You already interviewed other contractors (do not tell him) and have one to start if he refuses to go to the site, and they dig in that same day. Never threaten just act with honor and courage.

If he refuses, get any materials you paid for from his garage. Secure the site from theft immediately. If the house is complete enough to have someone stay there,( the house is heat working).

So I gave you the hotel contact (sign up for Choice), enterprise will deliver a car ~ choose a 4 wheel drive if you can with hatchback, the notary you send instructions/ maybe she has a boyfriend who can help with the night security. Around 2 AM is the vulnerable hour. How handy are you with tools? Cleveland Public Power/don't know if you are Dominion Gas but you should know. What needs to be buttoned down?

He's not going to pay YOUR lawyer fees, if you chase him in court it's going to be more losses and days where no work occurs means greater $$$$ 

Sounds like you expense a good deal of your earnings on IRS returns, which is typical for self employed people. If the net number is negative or zero - probably does not work with owner occupied purchase. A maybe for non owner conventional with big down payment.

A bank statement loan is a NONQM product. Your high FICO is used in the rate. We take 24 months statements of ONLY ONE bank account. Your deposits of rents or sale of property could be used to show income for a "flip investor." An expense ratio is applied to the type of business and how many employees you have- one man band flipper probably we take 10-15% off the averaged deposits. That number is the income for debt to income ratio - so your bills matter as well: vehicle loans, student loans even if deferred, credit cards are in the back end ratio. A bank statement loan can be owner occupied or investment 1-8 units. The rates vary for property type, use etc. Rates are lower than DSCR and close to conventional. Property has to be ready to rent if an investment not a rehab. The lender must be NMLS licensed in the state. Many "lenders" on BP are not. There are also 3 month, 6 and 12 month programs - I gather your statements and review with you. Deposits like a refund from IRS or deposits that don't match to the business type can be excluded. 

Your 2022 2023 IRS net bottom number is used. You can now file 2023 BUT the lender is going to require 2021 as we cannot get tax transcripts for 2023 (just yet if you file digitally it takes about 7 weeks to show). The averaged income for three years is used. You can use your CPA to write a profit and or loss for year to date 2024 and even 2023 but again it's the income After all your expenses for a 1099 employee. Most "independent agents" are a broker and they file schedule C not a 1099. 

American citizen working abroad- well are they still far away? FHA is for owner occupied. The employer has to translate into English any employment contract. Borrower will provide bank statements for past 26 months showing the deposits of claimed income, also translated. Would need letter from CPA as to why or how the income is not taxed in the US. Expats have to file. see here https://www.irs.gov/individuals/international-taxpayers/us-c...

So the forms had to be filed in the past to be verified. If never filed and they were supposed to file, cannot use as income.

Say the borrower was in college until 12/1/2023 and now they have a job w-2 in the line of work they graduated. Provide college transcript and degree; offer letter from job; copy of payroll check; deposited into bank account. 

All income has to be verified from source and often with two different types of verification.

The buy down is a method to burn hundred dollar bills. If seller giving it, use it another way. If you are paying it, don't.

If there are two comparable sales with a loan, the loan is larger than $100000, loan to value 75%, your FICO is above 690, in your personal name or ESTABLISHED LLC vesting, you have a lease and deposit check- cash out in 60 days is available

 True.

The jargon of private money makes it sound friendly but has no meaning in the lending arena.

@Chris Seveney @Jay Hinrichs @Account Closed you are professionals. That knowledge vets the borrower AND can get non-payor out fast without many fire drills. An individual owner, (often elderly) lacks the savvy, contacts, guts... and they fall into a soupy battle to reclaim the property. That seller didn't have the money or "tools" to fix up to sell or find a decent tenant and is in far worse shape than before he carried paper. 

There's a dude in Santa Barbara who hasn't paid since 2020, his tricks are far worse than that movie Pacific Heights. 

@Timothy Albright  demonstrate on paper that bad things won't happen to convince the seller that financially he gets more than by just selling for a discount. Get a CPA to show the tax benefit, insurance policy paid in advance for a year, a servicer who handles the 1099 and you cover it, your perfect credit history...