All Forum Posts by: George Despotopoulos

Where did you see/learn that you can get bypass seasoning by doing this? I would assume any lender who does a cash-out will still require you wait the 6 months or whatever their seasoning period is from the time you were deeded the property. I could be wrong so I am curious where that came from. 

Also, in most jurisdictions, I do not believe notes are filled/recorded anywhere. You do record the security instrument with the county but usually the note is not.

If you're qualifying for conventional financing and they're giving you better terms than seller financing then definitely go with the bank. 

Seller financing works best if you can't get a loan from a conventional or non-bank lender or where the terms are much better with the seller financing. Here, it doesn't seem like it makes much sense to go with the seller unless they throw you some heavy incentives.

@Jason T. you would have to (along with anyone who owns 20% or more of the entity) serve as a guarantor for the loan.

@Ray Hernandez - ok, I was just wondering. My opinion, I think you're better off investing in a buy & hold. 

Short term lending could be fruitful, but you need to get volume and usually investors want at least 6 month terms, but it's usually 12 month terms. Also, there's the added risk of being compliant with federal regulations & state laws as well as properly assessing/vetting both the borrower and the property.

@Ray Hernandez - has anyone came to you looking for 3-6 month term loans? 

Short term is usually referred to as hard money or bridge loans. 3-6 months is pretty short, standard is 12 months. Usually you make a few points at closing and then the interest-only on the loan monthly with the principal coming due at maturity. 

It's hard to say if it's better or worse, it's a completely different investment. 

Lending is tough, you need to know the market you're lending in, usually you want to have an understanding of credit-risk and be able to pull credit and run background to get a better read on your borrower. Also, most deals tend to require a lot of capital ($50K+).

Most states exempt business purpose loans from licensing requirements but there are still certain rules/regulations you have to be mindful of. If you're just looking to fund a handful of deals a year you  may be OK (consult an attorney) but definitely do your due diligence. 

@Ethen Weaver the extent of my experience/involvement with a land contract is when I was a private attorney and represented a party involved in one. I would just say to have an attorney draft it for you and make sure you and your family member are on the same page with everything, especially the payment obligations and what happens if you're late or default.

The loan amount you'd like to get is $25K-$40k? That's tough for conventional financing (although one individual just posted earlier saying they got $25K from Wells Fargo for an investment property!). A HELOC would probably be a more realistic option than a mortgage, but you may as well call credit unions/local community banks and see.

The above comment by Kevin Romines is sound advice. 

To answer your question @Prashant Sharma there lenders that will close in an LLC but it's usually non-bank lenders that prefer this model because it's business purpose lending. Rates are higher than conventional, and like Kevin mentioned, Fannie Mae is the best rates/terms.

@Jonathan Lee

You should know what your $500 is going to and in writing (whether it's an e-mail or even a text message). It should usually be refundable less expenses incurred. Sometimes lenders charge an upfront fee to cover for expenses such as ordering/running a automated valuation, pulling your credit, and running a background check. 

I definitely agree with others, $500 is a little high, especially in relation to your loan amount. They should be able to provide you a breakdown of what it goes towards. An application fee would normally get paid to the lender and the lender pays their expenses through it. Appraisals should get paid directly to the appraiser.
@Jonathan Lee