All Forum Posts by: Guifre Mora

@Karen F.

Private lenders can do what they want with their lending criteria. Here is what the market currently goes for and general guidelines.

Rate 7.99-14.99%.

Points 0-5. (Up to you)

Prepayment penalty (up to you)

Term 1-36 months

LTV 70% is the sweet spot could be 80-30.

Rehab funds stay in escrow and drawn as work is completed.

75% rule (total cost of purchase and rehab should not be 75% of the ARV)

Interest can be paid for entire loan amount (purchase & rehab) or just purchase and as rehab is spend it’s added to the running balance.

Interest only payment.

Balloon payment.

Now there are borrowers who qualify for 90% LTC of the project financed. This the ones with liquidity and experience.

Hope it helps

@Donna Hutchinson @John Thedford is right its a scam. Only thing that gets paid upfront for loans are credit report y property appraisal.

@Joshua Slatton

Although every loan is unique and each lender varies with their requirements, one would find that these items are consistently what make up a comprehensive loan package. As a professional lender I will guide you based on the information provided.

You mentioned you ran into the “financial situation again” it’s vague statement and for us to give you useful advise we need more information. It’s a red flag that twice you where denied for financial issues ...

You mentioned it was a gift form family and hard to proof (ownership?) it it under a family trust?

please elaborate or PM if you want to keep it private.

For the sake of this post here for what you shared and what could be available:

Condo, owned clear and free appraised value of 400k

Investment property under LLC

Vacancy status. Unknown

Monthly rent. Unknown

Market rent comp. Unknown

Years owned. Unknown

Purchase price. Unknown

Taxes current. Unknown

HOA property. Unknown

Borrowers experience in RE. One property owned (subject property)

Borrower credit Poor

Financials unknown

Loan request cash out refinance 75%

You’re going to have to go the commercial loan origination route and let me give you pease of mind on this and for all future investor reading this.

Commercial mortgages are lenders (banks, private equity etc) that offer mortgages for specific time of properties that are not owner occupied primary residence witch are under strict legislation.

This could be why you where denied. You must approach a specific lender who’s niche is Investment properties.

Rates are higher the a conventional owner occupied mortgages and that a fact of life for all investors. (Unique for each individual and deal)

Even if your dad's financials are bad as long as his Fico is around 620 title is clear, LLC is in good standing there are lenders with a product that fits.

Rates will vary depending on Fico, location, DCR, vacancy etc ... LTV 75 and lower, is a matter of checking off boxes and see what fits your scenario.

Little hard to give you a good faith direction to follow with out having all the info.

As for your question. I'm not a fan of HELOC for one reason. It hits your personal credit. Adds debt, monthly payment commitments and is a large balance loan so banks and lenders will see that you are a riskier borrower because you can get your self in trouble by over extending credit use. It's my personal view and there will be other who successful have used them in RE.

@Stephanie Yi

The quick answer is yes. But before you run looking for a lender and get a no or a rate that is not what you expected there are more pieces to then puzzle to consider. Not all lenders are equal and they look at each deal and fit it into their loan programs. So a niche lender (Loan program) might be needed.

Please answer the follow:

How long have you owned the property?

Some lenders will restrict a min time owned.

Is the property owner(s) a LLC, trust, Corp, multiple owners?

Some lenders don't allow LLC trust Corp.

What’s the owner(s) mid FICO?

This is a pricing factor lower Fico higher interest. To low no loan or low LTV.

Is the property rented?

Lenders will see if it's creating income, won't touch it if they are vacant. Some will at a lower LTV. Or rate will be close to HML.

Location of the property?

not all lenders are nation wide or lend in rural communities are restricted to certain states. Etc....

If you feel more comfortable not sharing in public PM.

Your deal has good potential let’s get you to the right lender and save you time and $.

@Lauren Perry i’ll be happy to assist you.

PM me your info and we can discuss further. 

@John Pettas try FundLoans.com they are also based in SD and are experts in non QM. See how they compare.

@Alex Bekeza great point. This comes from inexperience LO’s. I try to connect with someone higher in the food chain and had better experience and are more realistic. (Regions Accounts manager, VPs etc)

@Jared Rine yes

@David Adamolekun that a good rate in the low end of the spectrum.

Commercial rates are going between 5.5+- to 8.75+-

Compare the numbers: adding 5% to save .12% would take you 12.25 years to recuperate the extra downpayment.

20% down = $120,000 loan. x 5.62% = $690 a month + origination cost (2%) $2500

25% down $112,500 loan. x 5.50% = $639 a month + origination cost (2%) $2250

$250 savings on closing cost. $51 savings on the monthly payment ($612 Year).

totals cost of the 5% down payment $7750 Div by $612 = 12.66 years to recoup the extra 5% put down because the yearly saving is minimal.

Now if you buy down interest points with your 7500 say you could get 4.62% it would take you 8.56 years to recuperate your $7,500 and save you $26,568.41 in the length of the 30 years.

@Enrique Vazquez thank you for sharing, 114 hit is huge. Well if you refinance under your DTI it will affect your chances of a good rate for sure but there are products that are tailored to Investors with low credit or asset-based loans. Good Luck