All Forum Posts by: Richard Scholtz

@Carlos Mesa  FNMA and traditional lenders have no problem with self employed contractors...Here in Seattle many large fortune 500 companies have contractors that have been with Boeing and Weyerhauser and MSFT year in and year out. Same with Dept of Defense at the military bases... ...have many many civilian contractors....all paid on a 1099.  After 2 years at their respective companies or the "job shop" which they contract with........they buy homes...

Most lenders need 2 years of self employment history along with tax returns showing income and what not. There are some programs that can use 1.5 years of history, but most want 2 years. You have to show income as well you can't just write everything off on a schedule C.  When you are 1099'd it is considered self-employment because you pay your own taxes and file a Schedule C with your tax return which allows you to "write off" costs of doing business or other business expenses. lenders will have  a provision to 

1) give you back any depreciation as income and 

2) to offset any auto payments you wrote off against your debt ratios. 

Same credit score and down payment rules will apply.

If you cannot do that ---  

Then look at a Stated Income Loan. The rates are 2-3  points higher then FNMA but qualifying is more based the rental income of the property being bought. Owner occupied is out. Look at a portfolio lenders....This is not hard money but 30 year financing using banks statements or some alternative STATED loan....and they use the rents to support he loan with little regard for your 1099 status.

PM me for for program parameters.... as we represent 7 lenders doing those...

@Ana P. - Davenport is a fine town....Got friends that live there...just off I-90.

PM me or send an email and i will forward you the Realtors names.

Ana Pastor

Thank you @Jerry Starr for a resource knowledge post...2nd what you said.

Hello Jameson Sullivan, I agree with @Brad Smith, FNMA lenders in Tacoma  that will go down to a 640 score and if you have owned the property for 6 months they will use the new appraised value (ARV) to determine your 20% equity. I know I have been here 25 years...... My caution is East Tacoma and Hilltop not a favored areas :-) ....you should know why!

To answer your question....Yes a refinance is almost as if you were buying the house from yourself as far as needing credit and title and appraisal. However no down payment is needed as you hope the house now has some equity. 

Start with FNMA lenders....

1) Local S+L Portfolio (Local Savings and Loan like OlyFed, Washington Fed, etc) and they will price 4% - 5%. Find one that will pay the closing costs for you ... by bumping the interest rate 1/8% so you are not going backward with a bunch of fees.

2) Then look at the finance companies (Hedge Funds, like Velocity (expensive) and Black Rock and others...) that will do Stated Income Loans (no Doc) Those are 30 year fixed loans that price about at about 6-7% but will give you the benefit of the ARV value, your finished improved valuation even if you have only owned it 90 days. They will also lend to LLC's and not require you to qualify for the loan ...as they rely on the rents to make the payment.

Hello  

Davenport...had a tough time getting some appraisals done in that town..... :-) Very few comparable sales...and my appraiser wanted to use Spokane comps.! Been active as lender in King County since the 1990's. Agree with what is said here...as far as cash flow....The Core of King County ....anything close to Seattle (less than 40 minute commute) is too expensive to Cash flow if only a S.F.R. The only properties that cash flow are tri-plex and 4 plex properties ...as you need all 4 rents to over come the mortgage payment because properties are so expensive. It is a a great place to own properties for appreciation ...but they will not cash flow with only one rent. The further you go away from Seattle the better....Lynnwood, Everrett in the North and Tacoma Olympia in the South. We provided FNMA loans on 2 four plexes in Bremmerton and Olympia ...with 30 year rates under 4.25% they actually cash flowed nicely......and only cost as much as a small house (SFR) in Seattle which would only have 1 rental income stream not 4. So my conclusion is ...the closer to Seattle you go ...the more a SFR does not make sense but a 3 or 4 plex may make sense. Note aside ....larger than 4 units adds all kinds of other unfavorable financing complications. Good luck. I can recommend some Realtors...that work in the investor field in King County ....I am not a Realtor.

Hello @Houtan Moravej

There is Seattle based Savings and Loan that portfolios their loans and have a whole program just for Canadians as they are just North of us.  I know they cover the West coast ...do not know about back east. 

They will do standard USA rates + .25% with a 25% Down payment for Owner occupied or 2nd home.  35% down for NON Owner.  1 loan per borrower.

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Other than that you are going to look at some of the Stated Lenders...who will lend to a LLC with 25% down ...if you do NOT have residency Visa's. I have posted on those Stated Loans so will not repeat all that. Hedge Funds and finance companies will give you 30 year fixed rates to an LLC with very reasonable rates,...

Regards

Richard

@Joe LeontiI can't get anything under 20% down for NON OWNER! Joe - do not forget in WA rentals end up being meth labs...so lenders want a serious investment and 2-4 family units take 3x longer to sell than SFR units. SO YES...that is the minimum down for an investment property --- and FNMA who holds 75% of all the mortgage paper just upped that to 25% down for all 4 plexes. So get used to the 20%+ down.

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I may suggest Boeing Credit Union for WA state they just did a non owner jumbo (770k) SFR for us for 4.25% and $500.oo in fees plus title and escrow. They are not allowing 10% down on rentals however so plan on 20% - 25% DP as per FNMA but they are great on NO FEES.

There is only 1 credit union that still allows 20% down on multifamily units because they portfolio their loans and so did not go along with FNMA......and it took me 115 phone calls in Washington State to find them...so they are there if you look.

We are a FNMA lender in WA so been doing this for 30 years in King County  so we would provide a Estimate if you care to contact us, but Boeing and Harborstone Credit Union is open to all WA residents and I recommend them.

Travel well

Richard

@Patrick Keely

• FNMA is offering rental loans for 30 years at about 4.25% was our pricing on non owner with added hits to pricing for Non Owner and LTV over 70% and scores less than 720
• You must not own more than 10 financed properties
• You must have taxes filed and have some kind of income
• scores over 640 but ANY credit union or residential mortgage lander can do that for you in the town where the property is located.  Credit Unions are sometimes even better.
• Cannot be made to an LLC ---but to a person....

So if that works....Always go FNMA first.  They hold 70% of all residential mortgages in the country for very good reason. 

Regards

Richard

@Eric H.  This is not  the loan to rehab the property with as that needs cash draws and an exit strategy --- Those get priced as a construction loan and are short term.

This loan is the exit strategy to a rehab project - as the loan based on rental income....and a stable lease...not a vacant shell with all the windows broken out

To get a REHAB interest only loan .... will be a short term 12 month or less loan interest only at 10%+ rates....and your skin in the game will be needed to acquire and fix the property.

We have a lender that does both --- and that saves $ on the costs as the same final appraisal is used and only one underwrite...but these are two different kinds of loans....with very different terms...

The costs of the rehab loan drops with each finished rehab completed....as experience and track record are rewarded.

-------------->  This is a the takeout 30 year fixed loan to cash that out once the rehab is complete and based on 75% of the final valuation. (ARV)

 If you get rehab loan and put yourself in TITLE for 90 days then the final loan will be determined from the final (rehabbed) appraised value ...so a good chance you can recoup MOST if not all your original costs if done right.

What happened is the banks got stopped from doing the Stated Income loans since 2008 --so hedge funds and commercial finance stepped in.  So they priced themselves about 2% over bank rates and about 4% below traditional "short term" hard money loans...

This final loan it is supported by rental cash-flow and the underwrite still depends on good credit and DSCR of 1.20% as most commercial loans are.

Send me an email so I can attach files....for your review.

Regards.

Richard

@Pete Crutchfield

Hello  --

From the SBA WEBSITE = Charitable, religious, or other non-profit or eleemosynary institutions, government-owned corporations, consumer and marketing cooperatives, and churches and organizations promoting religious objectives are not eligible.

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Depending on what kind of non profit...There are few lenders in that area.

1. Churches get underwritten based on giving units...not profits...and the number of families in a church...and the concentration of the donations by the largest 10% of donors//givers....Risk Magazine just rewrote the guidelines for churches.....and how to underwrite those loans.
2. Non profit schools and hospitals (Charter schools)  get treated differently again....and there are two lenders that will raise money for those based on a private small bond offering...but more expensive than a straight bank loan.
3. Hospitals and  assisted living facilities are treated differently again ....

So some more info on the type of NON PROFIT info would help us assist you better....

Please find a bank that understands those...as your average banker only understands DSCR and commercial finance is most comfortable with a profit driven enterprise....Non profits get underwritten differently

I  just completed the loan process for our church for $1.5 million for the land to be followed by a $7 mill construction that I shopped to 3 credit unions and 2 commercial banks...(((I happen to love our Pastor so it was a labor of love as volunteer for our church board.......and I have known him 17 years....)))

Quite educational.....despite my 20 years career as commercial lender.

Anyhow - email me I have three loan templates you can have to assist you locally. 

Regards

Richard