All Forum Posts by: Michael Dunn

So I just ran the numbers for doing a Cash-Out refi.  via using a Portfolio Loan , assuming 25% down payment 

The Properties that I am looking to purchase will have ARV around the $100,000 - $110,000 range

I am also assuming a LTV of 75%

My Example:

Purchase price of the Property  $35,000   ( this includes $5,000 for closing costs )

Repairs  $40,000  ( I'm pricing this on the high side )

Total purchase Price  =  $75,000

25% down payment on $75,000  purchase price  =  $19,000 required for the down payment 

Appraised value of the home ( ARV ) = $110,000

75% LTV x $110,000 = $82,000

My questions are these ......

1.  The amount I will have to Pay off when I go to do the Cash-Out refi.  =  $56,000   (  $75,000 purchase price  -  my $19,000 down payment  )

The LTV based on the ARV = $82,000

So is the amount of Actual Cash that I can expect to get back , and therefore use for the down payment on the next property ...... $26,000 ( The $82,000 coming from a 75% LTV on the ARV of $110,000 - The Current Mortgage amount ( Payoff ) of $56,000 ?

OR

Will I technically  Always have around $19,000 in cash to use for the down payment on all the following properties, so long as I keep my numbers the same, from deal to deal.... I.E.  My all in costs are around $70,000 - $75,000  and the ARVs come in around the $100,000  -  $110,000 range. 

If these numbers don't fluctuate from the mean , then $18,000  -  $20,000  will be a likely amount in real Cash $ that I can expect to receive each time that I go to do a Cash-Out refi. on a property ? 

Thank you so much for the help , I just want to make certain that I am running the numbers and calculating out these deals correctly.  Thanks again 

Michael, Thanks so much for replying and going ino detail about the 3 main different Loan types

The Commercial Mortgage is the one I Initially understood the least about .

You definitely helped me now understand the Loans and how they work

So if I go with say a 5 year term with a Balloon via a Portfolio Loan , Then I will have a 25 year conv. loan when  go to refinance my loan when the 5 year mark is up ?

How is the Interest Rate factored into this type of loan ...... Is the 5 year Fixed, and then when I go to do the refi. after 5 years, I can Lock in the Rate on he remaining 25 years

OR

Can I lock in the Same Interest rate for the Entirety of my Loan ( 30 years total ) ? This would definitely be Ideal , given how low Rates currently are

Thank you again, really appreciate it

Good Morning,

I have recently been on a quest to learn and find out everything I can regarding Portfolio Loans . I feel that I have a good grasp on how they work ( the Financing structure, the funding of the Repairs into the Loan, Interest Rate, Points, Seasoning Period, Down Payment, etc. )

What I'm still unsure of , is what is meant by a 5 or 7 year ARM ( as the Initial Loan that you get when you use a Portfolio Loan from the Get Go , But then after that time is up ( the 5 or 7 years ... depending on which ARM you went with ) , how then does the Financing , and More Importantly my own Personal PITI on the Property get effected, by me then having a 15, 20 or 30 year Conventional ?

It would seem that if My Loan was say a 5 year ARM when I first got the loan, that I would want to go with a 15 -20 year Conventional and NOT a 30 year , as I have just paid on my Loan for 5 years , yes ?

Although I'm sure you get better rates ( Interest particularly ) if you go with a 30 year vs a 15 or 20 ?

If my goal is to Purchase Investment properties as Rentals, using Portfolio Lending ...... Which Financing do I need to go with , and why please ?

Thank you for the help

Good Afternoon all,

I just have a real quick question ...... About how long does it take for a Title to be Recorded ?

I'm curious , because I have heard that this is usually what determines when most Lenders will allow you to do a Cash-Out refi.

Thank you for the help

Hi Rick,

Really great information, Thank you for sharing

Can you please send me the Link to your ( PETIO ).

Thanks so much

Thank you Robert

Zana,

Thank you so much .... Great advice :)

I will call the Clerk's office first thing tomorrow morning

And yeah , this property is in Terrible shape .  Looks to be about $1600 sqft.  Needs a full gut job done to it.  Likely in the $40,000 + range .  

If can get it for $20,000 0r so purchase price  , plus the $40,000 for the renovation, then it'd definitely be worth pursuing

Thank you again

Hi,

I'm not sure how to pursue and or find out the Original Owner's name on a Property I am interested in , that from what some of the neighbors have told me , has been vacant for going on nearly 6 years now.

I talked to one of the neighbors how lives next door to this property , and he told me that all he knows is the First name of the owner ( He , nor anyone in the Cove where this property is located ) knows the Owners last name

Well, the neighbor that lives next door, told me that the house has been vacant for almost 6 years , and that the person who lived there has been in Jail ever since.

I can not find the Property listed through the County Chancery Office , even when I type in the address

What are my best Options in trying to find the Full name of the person who Owns this property , and does it even matter , since this person is in Jail ? 

Since they are in Jail, who " Technically " know owns the property .... The City ?

This property is severely distressed and needs a Full Reno job ( we're talking $40,000 at least ).

The neighbor I talked to , said he and everyone else who lives in the cove would love to see it fixed up, as it makes the Cove/neighborhood look bad

My thinking is , if the City now has ( or has had for almost 6 years ) , and given that this property is in such rough shape ..... Why have they not torn it down ?

I would Love to find out who owns it and purchase it ( if the Price is right of course ) , I just don't know how to go about finding out / Contacting who I need to , to Try and Purchase it.

Thank you for any help and information on how to best go about finding out who Owns this property , and any other Properties that look Abandoned /Distressed .

I have considered Knocking on Neighborhood Doors and asking them in Person, as well as Putting a Letter in these same neighbors Mail Boxes to hopefully get their help in telling me the name(s) and Contact information ).  Good Idea(s) ?

Thanks again

Good Morning,

Can someone who has personally dealt with and or knows of some Trusted Portfolio Lenders that are in the TN and MS area, please post these Lenders Contact Information , as well as who to ask to speak with when I call.

I'm preferably looking for Portfolio Lenders in the Shelby County ( for TN  area ), and in the Desoto County  ( for the MS area )

It seems that it's a bit hard to find Direct Portfolio Lenders online , especially those that advertise that they do these type of Loans of which are smaller Banks and Local Lenders

Thank you for the help and any information or personal experience anyone is willing to share with a Lender they have used that does Portfolio Lending.

And also please ..... What Terms did the Lender(s) you used offer,

1. The LTV on the ARV

2. What Percent down do they require ( 20 or 25% )?

3. What ( If any ) Seasoning Period do they require

4. What type of Interest Rate did you get

5. What ( if any ) amount of Points did you have to pay up front

6. What about tying the Costs for all of the Repairs into the Loan ...... Were the Funds administered to you for the work out of an Escrow account ? And how where the Draws given .... once a month ? Every week ?

Thanks again, I appreciate all of the help

Hi Brandon,

Yeah, i'm using a local Lender , so hopefully they will recognize it within the 6 month period from the day I closed as you mentioned