All Forum Posts by: Darren Eady

Small (under $50k per property) conventional loans are hard to come by.  I have a portfolio of properties around Cleveland and am also looking for conventional loan pricing for over ten cash-flowing rentals.  I'm flying there later this month to meet with banks as well.  Let's let each other know if there is a bank with the correct appetite for this.  Thanks!

Personally, I think you go with the cheapest, most available debt possible to get into rental properties and cash-flowing opportunities.  Why choose a higher rate on a rental property over a low rate on your personal residence?  Either way you are acquiring a loan for a rental property . . . you might as well use the cheapest debt you can find!

@Sherman Lau

Performing mortgage notes will accomplish your goals perfectly!

IF the bank found out you moved, they would not change their terms, but would require a pay-off to occur. The strategy you are inquiring about is used often. Your primary residence is your primary residence because you have the intent to live there. If your intent changes after you take out a HELOC, and you move, and keep making your payments, chances are the bank will not care where you are living.

@Demjan Van Der Kach

@Sandy Uhlmann - thanks for the shout out Sandy!  

Demjan, I don't have any notes currently but I could get your questions answered before the next one is available if you'd like to connect.  Thanks!

@Sandy Uhlmann

The lender who created the performing note would have already collected the evidence of insurance.  As the note holder, you, or your servicing center, will be listed as the mortgagee, which means you can call the insurance at any time and make sure coverage is in effect.  The servicing company servicing the note would get notified, if they are listed on the mortgagee clause, and would notify you of a lapse of coverage before you spend time or money putting more expensive forced placed coverage on the property.

Christy, I have an interest in working with you but will need lots more info.  All lenders will lend only on assets and not a business loan without collateral, I'm sure you can imagine.  If you own some of your rental properties free and clear, there is probably a few things we can do.  If you have no equity or collateral, there is nothing I can do.  PM for my cell.  I'll be available tomorrow if you would like to discuss.  Please put together your portfolio on a spreadsheet so we can discuss your business model and look for equity to use for a loan.  Thanks!

So, you would like to sell your properties no money down so you can receive an interest rate of 8.5% and allow this person to control the properties so that if they do not make payments to you, you are left having to sue and foreclose to get them back?  I'm sure it is not sitting right with you because there is no "skin in the game" for the buyer, which makes them more of a lease-optioner than a buyer with you holding all the risk of non-performance on his part.  

I would definitely NOT do this deal as it is currently presented.

IF it were a lease option, sub-lease deal, I would only consider it IF they put down a minimum of 10% and I would NOT give them title so you are left foreclosing if the deal doesn't work out.

@Bob Malecki - Thanks for the mention

@Samuel S. - I have friends with a bunch of performing notes in Michigan.  I can connect you if interested in only that market.

@Tim Dobbs

You don't need to hold an asset in an LLC like you do a liability (such as a property) as no one can trip and fall in a performing note like they can in your property. Many of my clients still use LLCs though to my hold notes as it gives some separation and piece of mind. I'd like to talk you out of buying 2nd mortgages though. My rule is NEVER buy a 2nd that you don't have the funds or ability to get the 1st mortgage cheap. SO, I almost never deal in 2nd mortgages. I'd be happy to discuss more with you on a PM.