All Forum Posts by: Matt Devincenzo

With the info provided, I'm not sure your objective is achievable...

The high DP will be the reason most new investors won't be able to perform. 

The high interest compared to market rate products is why most experienced investor's would likely be uninterested.

Average asset value is ~$120K, so that tells me these are stock that institutional buyers would be less likely to be interested in. 

Not wanting to do OO means your best options on these, local buyers who would buy off market for better loan terms are out.

Based on what you shared, I'd try to find a regional/local investment group or club that might be willing to do a single transaction with no seller finance. I realize that wasn't your question, but your responses indicate that's the best way to achieve your objectives. 

As someone dealing with agencies daily...don't hold your breath. State CC has has a 60 day review for decades, if they can't meet it they simply ask the applicant to voluntarily extend. If you refuse they deny the project for lack of ability to review. The same happens on ADU "60 day permitting" requirements. To be honest 90-150 days to review and approve a 150 unit project is nearly impossible given the standards in place and the requirements in order to meet regulatory guidelines.

I'll be happy to be wrong on this, but for over a decade that I've done this there has always been talk of streamlining and it's just that talk.

@Robert Ellis it looks like you're active today, so I wanted to put this back in your notifications in case you missed it yesterday:

What's that made of? Is it snow fence? Or chain link with a red/orange shade screen?

Another thought would be offer to put a small block wall like you have enclosing the fire pit at that same location. Either make it tall enough so that no one wants to sit on it or climb over, or make it low and put a glass railing on top so you can see still...it's less 'organic' than I'd usually want in a mountain retreat but I think given the fire pit you have there it works...it's more expensive, but durable so maybe it better solves his concerns. 

I'm going to push back on this...there's nowhere near enough info to say this would help. Putting the home in an LLC changes nothing as it relates to the personal guarantee associated with the debt. Single member LLC with a SFR is almost guaranteed not to be a non-recourse loan, and whether it is included or excluded from the DTI calc is up to whoever is UW the loan.

Since Michael is looking to get an equity loan, we need to find out which property the loan is being tried on. Would he even consider refinancing the rental and putting it into an LLC(not just transferring it to an LLC)? Does that even resolve the equity loan UW issue? Could that refi be a cash out to get the loan he needs? Are the loan proceeds for personal or business use as that changes the calculus on the cash out?

Again I reiterate, if you have a cash flowing rental your DTI should improve not worsen. So either your DTI issue isn't related to the rental, and you probably need to get your financials sorted out. Or your lender/loan product isn't following the conventional guidelines. But just saying get a DSCR loan is short sighted and self serving. @Jay Hurst is the only lender who responded with an attempt at actually answering the big picture question without a simple "go get a DSCR" and no understanding of all the above. If the use of these funds is for personal use, which an equity loan might indicate, then a business purposes DSCR may not even be feasible.

For loan servicing, do a search here on BP there are many threads with suggestions. A few names to help in your search are FCI, Madison, Allied...

As far as the land lease idea, forget it...two reasons...

1) There will be a value hit to the sale units due to the land lease payment. You'd need to do an analysis on the pricing to figure out what exactly it could be. But think about it do you see big builders regularly doing this in the area...or anywhere...the answer I can almost guarantee is no...if it was worth the value of the lease they'd do it themselves. I've only seen this to be somewhat normal in a few areas, the NE where they had old land leases from over a century ago, or in CA like Palm Springs where they had Indian lands that were leased for the homes...it was a solution to a very specific problem and happened on hundreds of acres not just an in-fill small condo.

2) Which brings me to the second issue, you're marketing something that's unusual for the area. People prefer to own what they understand and are familiar with. In a sense why do new subdivision homes sell as fee simple with land ownership at all? Really land ownership comes down to a piece of paper saying I own it, vs another piece of paper saying the HOA owns it and I own a 'condo' unit with the rights to use the land. So why not just make a simpler piece of paper that says the HOA owns all the land and I get to just use this specific piece of it? The answer is because people prefer to own their property...there's a greater control they feel with that piece of paper...and the same is almost 100% likely to be the case here.

@Quiana Bruce the other thing to attempt here since I see it is a larger parcel at 18 acres, you could consider splitting off 1/12 of the area (~1.5 acres). Everyone would need to agree and sign docs, but they 'give you' your 1.5 acres and you would 'give up' your 1/12 ownership in the rest of the property. If you did that you may have a much more sellable piece of property...most people won't want to buy a partial interest with unrelated parties. But there's a buyer for almost anything at the right price.  

If the probate is done and you legally own your 1/12 then the process is exactly the same as any other sale. You simply execute a deed and transfer the 1/12 ownership to the new buyer. But the actual buyer's for that will be very limited since they're only getting a 1/12 interest in the whole property....essentially they're 'partnering' with the other 7 inheritors. Your best bet would be for one of the other 7 to buy it from you since that will make their ownership larger...the best thing is to get back to where one or two people own completely, otherwise it keeps getting diluted every time someone inherits. 

@Robert Ellis are you going to answer @James Wise questions regarding identity?

I know @Rene Hosman and @Scott Trench have expressed that transparency and addressing concerns are huge on the platform. If you have a stage name for your SM presence etc, I'm sure a simple explanation would clear this up.

A new address on the property won't do anything for what you'd like to accomplish. The loan is tied to the legal description not the address..."Lot 1 of Map 123"...when you filed the new survey the loan didn't get stripped or 'lost' from that description, it just ended up attached to "Parcels 1-3 of Map 456" by way of the 'chain of title'. Even though there's no deed showing the loan on the new parcels, the chronology and legal theory ties it together. To accomplish what you want there's three steps that may happen separately or it may need to be concurrent:

1) Reach out to your lender and ask them about their requirements to complete a partial release or reconveyance? Essentially what do they need in order to let you leave the loan on Parcel 1 and remove it from Parcels 2 and 3? It's a more common ask in construction and commercial financing, but even conventional loans have guidance on the request, so you just need to ask and get to the correct person to answer your question. 

2) Talk to a lender/bank about the terms they would lend on the vacant or ax barn property. Make sure to ask your current lender if they'd consider it as well.
3) Get all three parcel appraised to establish a value. Do not do this before you talk with your current lender and your potential lender...they may require their own appraiser, they may have specific requirements, or if your current lender is local and willing to do a new loan on the other parcels they may work with you on value without a formal appraisal.

Final thought, if for some reason there is difficulty getting the above accomplished, you still have an option. Just go and get a refi of the existing loan, but when you get the appraisal and the loan approval etc. make sure that everything is only for the parcel with the restaurant. The only thing you want to make sure includes all three parcels is the reconveyance/release since it was tied to the entire property you want that completely released. Then you'll have one encumbered parcel, and two unencumbered parcels.