All Forum Posts by: Keith A.

@Albert Bui The scenario you describe would be best using a private money.  I would have to see what would make sense to someone that would do that.  Hard money seems expensive for this purpose.

@Albert Bui Yes, your last response is what I am thinking to do. Pull money out of free and clear property using HELOC. Use the cash to buy another property and refinance the property that is encumbered by the HELOC.

@Albert Bui Thanks for the information.  I am going to checking banks to see how they are with doing HELOCs on investments properties > 4 and check on the requirements.

@Jerry Padilla That is possible option and will check as well.  Thanks for the information.

@Bryce Y. I meant a HELOC on a free and clear rental property to then be able to do the rate-term refinance. So I thought of doing a 75% LTV HELOC and then doing a rate-term refi at that amount to satisfy the guideline. Curious if others had done this without issue.

I ran into a scenario where I am doing a conventional cash-out refi on a 5th loan and due to this "B2-2-03: Multiple Financed Properties for the Same Borrower (05/27/2014)" section of the guidelines am ineligible. I spoke to a few people and they mentioned doing a HELOC on the property and then afterwards doing a normal rate-term refinance with no cash out.

Has anyone done this or can suggest options to this situation?

Thanks for the replies.

@J Scott Correct, I was thinking to keep it simple by not pooling and only doing a single property per. I do keep enough reserves to be able to pay it off if need be but will definitely need to have a plan in place for that if there was more than one.

@Bill Gulley I didn't think of going that route but will check into it. What type of lending issues could come up with the original approach?

I would like to approach some friends for private loans but would like understand the process to better explain it to them. Does this approach makes sense? The terms and percentage may change but more concerned on the process.

1) Offer win-win terms. ex. 7%-9% rate, 25-30 yr amortization, 3-5 year balloon, 1st position

2) Have title company handle funds from private lender for subject property and closing.

3) Use loan servicing company like FCI to handle payments

4) At end of term either extend or refinance out

Any thoughts are appreciated.

Thanks @Brett Russell for the reply and it does to seem to be more of a preference than a rule.

So do you personally then bypass conventional lending and just buy into LLCs using commercial financing?

Some people may also buy in their name and then deed it over to the LLC assuming the loan won't be called.

I have properties in my personal name with conventional financing. A few of them have conventional mortgages so I am well under my limit. I am in the process of purchasing a 4plex cash and was planning to use an LLC (asset protection) but it doesn't seem to make financial sense to do it as it looks like all of the expenses like liability insurance and refinance loan terms become less favorable. I have a 5M personal umbrella currently. Does it make more sense to continue loading up on the conventional loans while I can making sure I have plenty of insurance coverage until jumping over to the commercial side of things using LLCs?

Makes sense @Chris Adams . Thanks for the advice.