All Forum Posts by: Stephen Chittenden

I think your best bet will depend upon what you plan to do. Almost anyone can offer you a bank account. We use TD Bank for our business checking account. We had our personal account there already, so we could link them and avoid any maintenance fees. There is a branch near our house and another across the street from my office. When it comes to lending, we just used MECU to close on a 30-year fixed rate loan on a SFH rental property held in an LLC at 4.875%. We had talked to EagleBank, but they were not interested in financing single-family properties held in LLCs. They seemed very willing to help with 5+ unit multifamily.

Originally posted by @Bryan O.:

Hi @Kyle J.. Thanks for the information. Do you know what the guidance is for properties 5-10 after the 6 month seasoning? I don't mind holding on to them that long to get better cash out.

 I think this is what you want to look at...

https://www.fanniemae.com/content/guide/selling/b2...

My understanding is that for 5+ financed properties, Fannie Mae will not purchase a note on a cash-out refinance. We just did this, but we used a local credit union that uses the FM guidelines, but does not adhere to them as they do not sell their investment property loans. They had us jump through a few extra hoops, but we closed this week on a 30-year fixed rate loan @ 4.875%. Not bad for a property held in an LLC.

Congrats, @Todd S.!  It looks great.  Did you do the work yourself, serve as the GC, or hire a GC?  

Originally posted by @George P.:

Originally posted by @Stephen Chittenden:

Originally posted by @George P.:

Originally posted by @Stephen Chittenden:

Originally posted by @George P.:

it's a local bank and it's against 7-9 properties. dont remember the details. we did a refi, combined the properties and they said, "here's the left over in a form of LOC. you can use it if you want to. it's interest only until you put the new properties into a loan".

you should get that... we never realized how much it would help us.

What do you mean by "left over"? Do you mean that you refi'd and were only at like 50% LTV, so they gave you 25% LTV as a line of credit?

when we refied the properties, they initiated a loan of ~500k over 20 yr. then they gave me a ~170k LOC with nothing out of pocket.

I'm just trying to figure out what the value of the property securing the loans and the LOC were.

what i remember happened was they assumed the loans of the properties and it came up to 500k. but they are valued at ~750. so the gave me the LOC of 170.

those are approximate numbers. does it make sense?

That's about 90% LTV. It's a generous amount of debt on them, but it's certainly possible. We're growing (and smaller) and I'm just trying to make sure we have explored all of our available options for growth. We bought 4 units (1 SFH and 1 triplex) this year. Hoping to do more than that next year. Maybe we can get in one more this year.

Originally posted by @George P.:

Originally posted by @Stephen Chittenden:

Originally posted by @George P.:

it's a local bank and it's against 7-9 properties. dont remember the details. we did a refi, combined the properties and they said, "here's the left over in a form of LOC. you can use it if you want to. it's interest only until you put the new properties into a loan".

you should get that... we never realized how much it would help us.

What do you mean by "left over"? Do you mean that you refi'd and were only at like 50% LTV, so they gave you 25% LTV as a line of credit?

when we refied the properties, they initiated a loan of ~500k over 20 yr. then they gave me a ~170k LOC with nothing out of pocket.

I'm just trying to figure out what the value of the property securing the loans and the LOC were.

Originally posted by @George P.:

it's a local bank and it's against 7-9 properties. dont remember the details. we did a refi, combined the properties and they said, "here's the left over in a form of LOC. you can use it if you want to. it's interest only until you put the new properties into a loan".

you should get that... we never realized how much it would help us.

What do you mean by "left over"? Do you mean that you refi'd and were only at like 50% LTV, so they gave you 25% LTV as a line of credit?

Originally posted by @Jason J.:

Good morning everyone,

I was wondering, what are your opinions for getting funding for my first fix and flip. I do have some savings and some equity in my primary residence, but not enough to fund an entire deal. I also have a good credit score 725+ along with a fairly well paying W-2 job. This would be in the greater Sacramento area.

Is there any chance a portfolio lender funding a deal with an inexperienced flipper?

 You might also talk to a bank about an unsecured line of credit.  I'd start with whatever bank you use for your usual banking.  Then move to others.  There are a number of them that offer them, and they can provide a lot of flexibility.  They have higher interest rates than secured loans, but can be powerful tools.  

The other option would be hard money, but that may be difficult as you don't have any experience. You'd have to identify the deal and make it look attractive. The more of the cost you are covering yourself, the easier it will be to find a HML who is interested. This will be far more expensive than an unsecured line of credit, but may allow you access to more money than otherwise available.

Finally, private money is always an option if you have friends or family who would like to help back you.  You have a lot of flexibility as to how you structure that--you could split profits (like equity) or you could pay them a fixed return (like debt).

@Harold Looney

 I haven't really looked.  We primarily invest in Harford/Cecil County.  We just live near Arbory Ct.

@Harold Looney I have seen MLS listings in that area that are significantly below nearby property values. My understanding is that there are too many renters in the HOA to get financing in many cases. Given what I know about rents in the area, it seems there should be some cash flow opportunities in that area. I haven't done extensive diligence though, so HOA dues or or maintenance needs may erode potential cash flows.

Originally posted by @Matt Jones:

Originally posted by @Stephen Chittenden:

This seems like the critical language to me... "unless extenuating circumstances arise which are beyond my control."  My concern would be that the fact that your existing house didn't sell and that your flip is taking longer than expected would seem to do very little to keep you from occupying the property.  The only expense would be the moving cost.  I'm not sure why you can't move based on those reasons.

It's not what most would consider livable until I can do the rehab.  Needs AC, water heater, appliances, flooring...

Despite the lack of amenities I could still move in, and it sounds like it makes sense to do so just in case.  I will definitely be "roughing it" for a little while.

 If the condition is that bad, I would feel reasonably confident that circumstances beyond your control prevented you from having the money to make the property habitable.  If you're doing all you can to sell your current place and finish the flip, I think that you aren't in terrible shape if FNMA asked.  Especially, if you actually do move in as soon as you have the cash to do the rehab.