All Forum Posts by: Nathan Frost

Hi, does anyone know of anyone that does 20-30 year commercial loans for single family rental properties?

Hi, if I have a decent amount of a business line of credit, how could I use that towards tax sales or auctions?  The tax sales have a 2 year redemption period but with Auction.com I could rent or sell right away.  Is it best to buy with the line of credit and then refinance that with a local bank for 15 - 30 years?  What is a good strategy in using the line of credit to add rental properties to my portfolio?  I would like to add 2-3 properties to my portfolio in the next 3 years.

Does anyone suggest a lending company/website where they purchase the property after getting a loan from them and then refinancing it with a local bank?

Are there any good online lenders? I have an LLC so could get qualified for a descent amount. My goal is to add 2-3 rentals.

Hi all, I am trying to figure out the best way to add 2 more rental properties to my portfolio from the equity in my primary or other options.  I currently have 11 rental properties.  I don't really want to do a cash out refinance because going from 3.125% to 7% interest rate just doesn't seem right.  The bank told me they don't do HELOCs.

What are other investors doing currently to add more properties to their portfolio?  I have about 90k in equity in my primary.

How do I find Quest Trust private lenders for buying deals here in my town?

Single Family buy n hold

Flips

Quote from @Benjamin Aaker:

I use a business line of credit frequently in my investing. The type I use is secured by the property, much link your primary mortgage. Because a bank rarely is interested in being second lienholder on a property, I have always used the same bank for the primary mortgage to extend the line of credit. I don't think its correct to say that banks aren't doing these loans, just that they rarely do them if they don't already have the mortgage. I recommend you talk to your bank's commercial banker and ask. My lines of credit usually are 1-2% higher rate and are variable. They should be paid off quickly, but do give readily available cash for when you need it and are low cost to maintain.

So tell me if this is how I could use my LOC.  Go find a property at the tax sales on the first Tuesday of the month or Auction.com.  Buy it with the LOC and try to flip it under 12 months.  If I can't flip it, refinance that asset with a bank, and then rent the property out to pay that loan or just pay on it till I can flip it?  Does that sound about right how investors use this strategy.  Cause LOCs usually are due in full after 12 months.  

Hi all, I am trying to understand this process as an investor. If I have a line of credit how can I purchase a tax sale home at the courthouse? I understand you use the LOC as cash but what can I do after that? Say I purchase and fix up the property can I sell it immediately or do I have to wait 2 years for the redemption period? How do investors use their LOC to buy homes at the tax sales and turn around and flip them? I am worried about the 2 year redemption period, or can I just disclose that in the sell of the home? My goal in theory would be to use the LOC to but the tax sale home, fix it up, and then sell it immediately, is that possible?

Quote from @Jay Hinrichs:

Quote from @Nathan Frost:

Quote from @Jay Hinrichs:

Quote from @Nathan Frost:

Quote from @Jay Hinrichs:

Quote from @Nathan Frost:

Quote from @Jay Hinrichs:

keep in mind most business lines of credit from a bank TRUE unsecured LOC's are on one year revolvers and they can and are frequently called.. another tid bit is many times they have a 30 day resting period per year.. meaning you have to pay it off and rest it for 30 consecutive days.

these are true unsecured LOC's from Banks..

also careful with the fake business loan lenders that say your all approved just send me a little money up front.. in almost all instances they are simply scammers crooks and thieves. 

So what do you recommend? Refinance it or pay it off in a year. One year could be tough to pay off a $10k LOC. What is an example of how to effectively use the LOC? Wish I could use a HELOC but a lot of banks around here are not offering them.

for me I use the funds for rehab and quick turns never to buy long term assets as 100% financing can put you underwater quickly .. those lines of credits are not intended for downpayment and long term holds.. they are to help you with cash flow in your transactional business thats what they are designed for. And frankly very tough to get U need to have a lot of liquidity have a lot of money in their bank good track record etc etc.. again I am talking about a true bank unsecured LOC.

I agree on being underwater quickly. I have made my fair share of mistakes. Mainly buying on the MLS and at 20% down. So I am trying to find ways to use equity and other avenues without using my own money for the 20% down and rehab work. So basically flips is that what you are saying? What if you use the line of credit to buy an investment property as cash to get a deal? What do you mean help with cash flow in your transactional business?

 OK here is how I have used mine over the years.

I had a 7 figure unsecured LOC that I would buy courthouse steps with.. boom cash buyer go to the bank pull the cashiers checks from my unsurecred line. Then once i get the trustees deed or the Sherrifs deed and its now vested in my name and I can get title insurance.. about 30 to 90 days depending I take that free and clear asset to my same bank and secure it up with my other credit facility that was 8 figures.. they advance normally enough to get all my cash back and then that cash pays off my unsecured LOC.. I use the Unsecured LOC also for rehab funds.. we stabilize then flip them make our profit and pay back the bank.. and depending on rates at the time I was borrowing on these lines at 4 to 7% with one point annually so I could flip say 3 times a year for the same one point.

thats how I use the lines and how most RE business's use them they do NOT use them for down payment on buy and hold as its not prudent to have 100% debt banks dont like that and we dont like it either far to risky when markets change on you like they are now. 

That makes sense my only concern is flipping a house at the courthouse steps usually has a 2 year redemption period before you can sell it. So for those two years is that where you take the asset and get it secured in a bank loan for those 2 years to clear the LOC and then sell it in 2 years?

 not sure what state your in..  But I dont think ( and i could be way wrong) but true sherrif sales or trustee sales in Texas have no right of redemption ..  it could be tax' sales that have rights of redemption but I dont really know since i have never bought one in that state.. My states were 

IN  MO CA OR WA NV I worked those markets. 

 I am in Texas.  I have always seen good deals at the courthouse steps which is the tax sales just wanted to see how to make those deals work if you can't sell them in 2 years but I could be wrong on that.  Or is it that you can sell the property just have to disclose in the sell that the original owner could redeem it up to a certain date? 

Quote from @Jay Hinrichs:

Quote from @Nathan Frost:

Quote from @Jay Hinrichs:

Quote from @Nathan Frost:

Quote from @Jay Hinrichs:

keep in mind most business lines of credit from a bank TRUE unsecured LOC's are on one year revolvers and they can and are frequently called.. another tid bit is many times they have a 30 day resting period per year.. meaning you have to pay it off and rest it for 30 consecutive days.

these are true unsecured LOC's from Banks..

also careful with the fake business loan lenders that say your all approved just send me a little money up front.. in almost all instances they are simply scammers crooks and thieves. 

So what do you recommend? Refinance it or pay it off in a year. One year could be tough to pay off a $10k LOC. What is an example of how to effectively use the LOC? Wish I could use a HELOC but a lot of banks around here are not offering them.

for me I use the funds for rehab and quick turns never to buy long term assets as 100% financing can put you underwater quickly .. those lines of credits are not intended for downpayment and long term holds.. they are to help you with cash flow in your transactional business thats what they are designed for. And frankly very tough to get U need to have a lot of liquidity have a lot of money in their bank good track record etc etc.. again I am talking about a true bank unsecured LOC.

I agree on being underwater quickly. I have made my fair share of mistakes. Mainly buying on the MLS and at 20% down. So I am trying to find ways to use equity and other avenues without using my own money for the 20% down and rehab work. So basically flips is that what you are saying? What if you use the line of credit to buy an investment property as cash to get a deal? What do you mean help with cash flow in your transactional business?

 OK here is how I have used mine over the years.

I had a 7 figure unsecured LOC that I would buy courthouse steps with.. boom cash buyer go to the bank pull the cashiers checks from my unsurecred line. Then once i get the trustees deed or the Sherrifs deed and its now vested in my name and I can get title insurance.. about 30 to 90 days depending I take that free and clear asset to my same bank and secure it up with my other credit facility that was 8 figures.. they advance normally enough to get all my cash back and then that cash pays off my unsecured LOC.. I use the Unsecured LOC also for rehab funds.. we stabilize then flip them make our profit and pay back the bank.. and depending on rates at the time I was borrowing on these lines at 4 to 7% with one point annually so I could flip say 3 times a year for the same one point.

thats how I use the lines and how most RE business's use them they do NOT use them for down payment on buy and hold as its not prudent to have 100% debt banks dont like that and we dont like it either far to risky when markets change on you like they are now. 

That makes sense my only concern is flipping a house at the courthouse steps usually has a 2 year redemption period before you can sell it. So for those two years is that where you take the asset and get it secured in a bank loan for those 2 years to clear the LOC and then sell it in 2 years?

Quote from @Jay Hinrichs:

Quote from @Nathan Frost:

Quote from @Jay Hinrichs:

keep in mind most business lines of credit from a bank TRUE unsecured LOC's are on one year revolvers and they can and are frequently called.. another tid bit is many times they have a 30 day resting period per year.. meaning you have to pay it off and rest it for 30 consecutive days.

these are true unsecured LOC's from Banks..

also careful with the fake business loan lenders that say your all approved just send me a little money up front.. in almost all instances they are simply scammers crooks and thieves. 

So what do you recommend? Refinance it or pay it off in a year. One year could be tough to pay off a $10k LOC. What is an example of how to effectively use the LOC? Wish I could use a HELOC but a lot of banks around here are not offering them.

for me I use the funds for rehab and quick turns never to buy long term assets as 100% financing can put you underwater quickly .. those lines of credits are not intended for downpayment and long term holds.. they are to help you with cash flow in your transactional business thats what they are designed for. And frankly very tough to get U need to have a lot of liquidity have a lot of money in their bank good track record etc etc.. again I am talking about a true bank unsecured LOC.

I agree on being underwater quickly. I have made my fair share of mistakes. Mainly buying on the MLS and at 20% down. So I am trying to find ways to use equity and other avenues without using my own money for the 20% down and rehab work. So basically flips is that what you are saying? What if you use the line of credit to buy an investment property as cash to get a deal? What do you mean help with cash flow in your transactional business?