All Forum Posts by: Joshua Fulenwider

Try talking to either a portfolio lender or a commercial lender. A portfolio lender can sometimes make a mortgage to an LLC, but each one is different. Rates and terms are going to be somewhat less favorable than a traditional mortgage.

If that doesn't work talk to a commercial lender.  They should be able to make you an investment purpose loan.  Amortization is shorter (20 years typically), rates are higher, and they may have a balloon.

In either case smaller banks are more likely to be flexible.

My experience with hard money lenders is that they want to have actual collateral.  What would be the hard money lender's collateral in your scenario?

I like your thinking though.  Depending on the amount your looking for could you obtain a personal loan from a bank for a short time?  Or from a website like prosper or lending cloud?

I would recommend Chase Furnas as well.  They manage 5 doors for me and do a great job.

Ashley, congratulations on taking the first steps.  There's a lot to learn.  Let me know if I can help.

This answer may be coming to you late.  But as a commercial lender I like when there are more borrowers signing on a loan.  However, your partner should know that by offering their credit they are signing up to be personally liable on the note.

This is mostly going to come down to personal preference and the market you are in.  My personal opinion is that I am willing to advertise early but don't start showing until I am reasonably certain it will be ready in a couple of weeks.  I don't want them walking through a property in terrible condition but if I'm down to painting and a few minor projects I feel they can look beyond that.

If your potential tenants are coming from another property they may need to give notice prior to vacating.  By showing early you may be able to line up a move in date with a qualified tenant earlier.

On the other side, if the place is an absolute mess or potentially dangerous definitely do not let a potential tenant walk through.

If there are any investors or property managers in your area you may want to ask them directly what they do.

You should be able to find a bank willing to finance this deal. Depending on HUD rents compared to market rents the bank may require some special reserves in the event that the HUD contract isn't renewed. They may also need to determine what the HUD vacancy rate is compared to the market vacancy and require special reserves in the event of an increased vacancy. Overall, a HUD contract is actually a positive for a bank as it is a much more predictable source of income than regular renters.

For your second question I haven't had direct experience with HUD but everyone I've talked to has said that as long as you continue to meet their requirements that it is fairly certain. If you are questioning it talk to the seller and find out their contact with HUD and then call HUD to feel them out.

Hope this helps.  Good luck!

It is going to depend on the lender and the deal you negotiate with them but chances are that the answer will be yes. Typically commercial lenders require personal guarantees or for you to act as co-borrowers along with the LLC.

Sometimes you may be able to negotiate limited guarantees.  In the event the deal goes bad you would only be liable for your portion of it.  

Derek,

If lenders or agents aren't responsive to your inquiries you may just not be talking to the right ones.  My experience has been that most real estate agents specialize in single family homes because that is where the majority of transactions take place so that is where they can make the easiest money.  The same is true for lenders.  However, anything that has 5+ units you will have to talk to a commercial lender about.  Due to Fannie Mae rules these can not typically be financed by a standard mortgage product.  If you just walk into a large  national bank chances are you won't immediately be put in touch with a lender that can help you.  Try smaller regional and community banks.

There are beginning farmer loans.  Check with your local FSA office (Farm Service Agency).  They will probably want you to put it into production sooner rather than later, though.