All Forum Posts by: George Despotopoulos

Depending on the type of financing you're procuring a lender may obtain a credit report and run a background check. Usually, it should come up, and as a lender I would hope it does. It helps us get a better picture of you as a borrower and thus helps us ascertain the risk involved in your deal.

There have been occurrences where the reports did not list all of the borrower's business connections. They disclosed them though and it was not an issue for us. We primarily look to the property's income and value. 

 Hi @Kenisha, I would save up to 25-30% of the purchase price to be on the safe side and account for closing costs/fees. 

It also depends on where you're looking to obtain financing from. We would require a 25% down-payment and our minimum loan amount is 50K. Other lenders have different requirements.

Hi @Nick Miehe our minimum is usually 50K from lenders doing investment property mortgages. We go up to 75% LTV. The minimum is there as the costs associated with underwriting/originating a loan are the same regardless of loan amount. Also, in the worst case scenario of a foreclosure, legal fees and court costs can exceed the loaned amount.

@Michael Cook sorry have not heard of them!

Hi, I was looking into this for personal use. I was recommended

https://www.amazon.com/Nest-Cam-Outdoor-Security-C...

1080p HD, cloud-recording (I believe extra monthly fee), and 130° wide-angle view. 

I think I'm going with two of these, holding out till Monday, hopefully the price drops.

@Jack Brown depending on your state and lender, your security instrument have it spelled out. 

For example, in PA, the mortgage sometimes contains a clause titled "Occupancy" and may spell out the requirements for that provision. 

Reference your closing docs, if you have a copy of them, and also seek clarification from your lender. 

 Yea, it's usually boiler plate but when you're dealing with legally binding documents it's never an assumption to make.

Those documents are very boring reads and in legalese, definitely not the easiest to comprehend and impossible to account of every little clause. That's why I always recommend to have experienced counsel either present at closing or review the documents with you beforehand at least on your first few deals. You can get a breakdown of the major provisions and at the very least advisement on what you can or cannot do. 

Hey @John Blythe were you able to review the closing documents before hand or have an attorney do so or at the least be present at closing?

This was usually something I explained to my clients at closing, if I repped the purchaser. 

Now as in my new role as a co-founder of a non-bank lender, we are not held to the same restrictions or requirements that traditional lenders/banks are, and we do not sell to Fannie. So this clause does not come into play. This would be something we most likely would allow one of our borrower's to do. 

Hey @Pete Sailhamer if a party is on the deed then the lender usually requires them to be included in the mortgage. This because the mortgage is the security instrument, or lien, that your lender will have on the property. If you fail to fulfill the promise to pay, as indicated in the Note, the lender may send you a default notice and thereafter foreclose on their lien (the mortgage).

Hey @Joe Geist, we're a lender that finances non-owner occupied rental property and hard money for business/investment purpose, on residential real estate.

We lend to an LLC, but require guarantors (anyone with 25% or more stake in the entity). From a regulatory standpoint we prefer lending to an LLC. Our products are business purpose or investment loans or rather loans in which the proceeds are not for personal, family, or household purposes or otherwise consumer purposes. Lending to LLC evinces that.

There are no rate increases or additional concerns with the LLC from our perspective.