All Forum Posts by: Saravanan Saravanan

@Hudson Walker Once you a property under contract; you could have a written up proposal in terms of purchase price, rehab cost, market value after renovation., rental payments.  Have a the high level break down on your expenses for this rental like property taxes, insurance, maintanence etc.  Then based on your profit expectations; see what you can offer to the potential investor, family member, in terms of terms.  

Once they agree (within your contract inspection period); then you use the title company and attorney to draw up loan documents and title policy for lender to close the transaction. 

If you want to prepare a proposal;  without a property under contract; that is another thought as well. 

@Antuan La 

The funds borrowed should always have to meet the objective in real estate investment goal.  When the exit strategy is shorter term and ballon would be covered within that time line; then you are in good shape.  Example are flips, turn key which you would sell to end investor (like rentals or apartments).  

The terms appears good in my perspective for invetment properties. You could potentially confirm there is no prepayment penalty or early payoff fees for this loan.

In long term perspective; you would have more free and clear properties when you go for P&I payment. Say if you acquire handful of these every year; then in 10 to 15 years; you could potentially have significant income and paid off the mortgage.

There are investors I know focus on 10 to 15 year payoff by contribution additional payments towards principle.

@Sheri Lowrance 

You could consider to check the renovation cost with another person for secondary confirmation.  

Confirm the Market value; after renovation with recently sold comps within 0.5 mile radius.  

Understand the costs involved for maintanence and costs incurred during the resale.  Then see if the profit remaining is reasonable.  

How about factoring for unexpected renovation and holding costs?  Say 15%.

How about the resale price is 5% lower than expected?

If you have resonable risk vs. reward; then you make decision as a go or no go.

@Benjamin Boynton 

My understanding is that non-warrantable deed means; there are no warranties on the title. In a warranty deed; the owner has legal title and full rights to the real estate.

Is this transaction on your purchase handled by a title company? If so have they provided owners title policy without exceptions?

@Account Closed Some lenders would charge minimum pay off amount for a loan (60 day or 90 day minimum etc).  Some charge close out fees to cover costs like Escrow release; Pay off preparation; Documentation; Discharge of mortgage etc.  Once you have the break down; then it would help both ways to have better understanding.

@Kristopher Shobe You can do this of investmet.  One of the aspect, you have to keep in mind; is that; there is enough cash flow from this property that makes sense; after paying off the personal loan.  You may have to factor in costs like property taxes, property insurance, maintenance of the property and vacany rate etc.

@Katie Hock Based on the nature of the request; we have provided loan for 3 years or even 5 years.  When we know the investor who is using the funds are purely for rental purposes; these options are available.  In these situations; we have to verify landlord rental certificate for the city and lease agreement etc.