All Forum Posts by: Chris Purcell

@Chris Purcell That's the plan - I've been looking at Michael Quarle's site for when it comes time to pull the trigger. Thanks for the heads-up on Freedom Voice - I hadn't heard of them before.

@Brian Truman That's another good source - Thanks!

As much as anything, I guess I'm wondering if doing direct mail can be successful on a limited basis, or if I have to attack it full-time to get results?

@Chris Purcell

I have done this a number of times. I found a regional bank in my community that was willing to work with me. The required no seasoning and would send the appraiser out as soon as I was ready. It is hard to nail down the rehab costs and the after repair value, especially as a beginner. Some of them I ended up leaving a little bit of money in the property (rehab cost were too high and ARV was too low), but others I walked away with cash in my pocket.

A couple issues...

1) I wasn't getting the jump in value that I thought the market justified. I talked with one of the appraisers and he said they are always going to error on the conservative side. It is hard from them to give a huge jump in value in just a couple of months. So now I'm holding my properties for a bit longer with private lending and then I will refinance around the 18-month mark.

2) The regional banks I have dealt with offer the commercial loans with a 5-year balloon. That means I need to refinance or pay off the loan at 5 years. I don't like the risk and now I'm going to explore some of the national asset lenders and see if I can get 30-year fixed loans.

Mike

 The Delayed Financing exception to the six month seasoning requirement, allowing you to do it instantly, is fairly well known, this shouldn't be hard at all.

Make sure your preapproval for the Delayed Financing is solid, and make sure you can source and papertrail alllllll the money in the form of large deposits into any of your accounts with funds that were used to purchase. That's the biggest downfall; folks think "zomg all cash, I can use $50k in cash that was sitting under my mattress, wahoo!" -- sure, you can, but not if you want to do delayed financing. 

I've done a few deals like this.  Some things to consider.. 

Most banks are requiring a 6 month or longer seasoning period.

70% LTV seems to be the norm.

Have you looked into a developing a relationship with a local bank that will partner on both parts of the transaction?

Hi Chris

Our experience has been that with community banks they don't require seasoning (assuming you own it free and clear).  However, what a lot of banks won't tell you is that they have a 30 - 40% rule, where they will deduct that percentage from your gross rents, then they will use the remainder to calculate your debt service ratio.  If the bank is using the higher percentage, you might run into trouble of hitting the ratio that they are looking for.