All Forum Posts by: Scott D Burrows

@Chris Trupiano

I would try using the phone book and calling all the small banks in the area and just ask about their appraisal process for HELOC's.

Try asking these questions 

• Does your bank do HELOC's on waterfront property
• Do you do drive-by appraisals? Just let them know you haven't done improvements yet, so not interested in drawn out appraisal process. 
• Make sure the appraisal isn't more then $500- way too much for a HELOC appraisal.

Some larger lenders may actually have more lenient appraisals due to the volume that they handle, maybe? 

Hope this helps! 

-Scott 

@Chris Trupiano

I agree with what you said at the end of your posting. Bringing the property to appraisal-worth level is probably the best course of action. 

Wouldn't be a terrible idea to get a short-term loan of some type to fund the repairs, and then pay it off with the refi, once appraisal ready, if cash for repairs is an issue.

However, I think what you mentioned is probably the best route to go. Really can't do much if it's unable to be appraised. 

Second thought: You could try to find a bank that does "drive by" appraisals, they wouldn't need to inspect any of the house and you could probably get approved for a HELOC in that situation.

Let me know if this helps at all. 

Good luck! 

Scott  

@Account Closed

I use Cozy for my rentals, as well as allow tenants to deposit the money, via deposit at bank.

All other methods are essentially the exact same. Venmo and Zelle is a little unprofessional and with the ability to add in expenses by address in Cozy and the ability to export the payments, I much prefer it to a generic app for payment such as Venmo or Zelle. 

Up to you, but I do believe that the more professionally you try to conduct your business and integrate into software's designed around what you are trying to do (collect rent) the better luck you will have with it.

One downside to Cozy, if you don't want to pay the extra $1.99 to get money quickly is that it can take 5-10 business days for the money to hit bank account. 

Also, Zelle and Venmo don't have automatic late fees, and also don't perform background checks, while Cozy does. Just a thought and its FREE. 

Hope this helps. 

-Scott 

I am working right now with a company called RDC Capital that may be able to help you. 

Also, are their pre-payment penalties on any of these personal loans? 

Another option: Get a credit card with zero interest (and do a balance transfer).

Find a company (RDC Capital, local bank/credit union (smaller bank)) that will give you line of credit (commercial) and pay back those loans with the LOC, which should be fixed after the "draw" period (20/30yr if possible). 3

Hope this helps. 

@Brett Palmer  

What issues are you running into regarding your DTI, other than having too much debt?

RDC Capital is a company that has some fairly decent rates, if you would consider going more commercial. Refi costs around $3K, which isn't too bad and they didn't ask me too much about by my DTI.

If you have $600K they will actually give a line of credit of $3MM with a draw period of a year at a pretty good deal, I think pre-payment is allowed after five years. 

Basically, they'd want you to have 20% of the $3MM to qualify for the LOC.

Again, I'm still in the process with them and will let you know if anything seems terribly fishy, but so far they seem fairly straightforward. Appears that they just make money off points, but they are also able to roll into the loan. 

Hopefully this helps a little, and also another way to get around DTI is by possibly seeing if a smaller bank will give a commercial line of credit (usually will be able to be used for a certain amount of time (1-2yrs) and then they setup re-payment on a fixed rate or ARM, usually over a 15-30YR time period.

For the commercial stuff, they will just want you to use your LLC and have at least one house in LLC, if possible to make the loan look better or more solid for when they sell it off to the secondary market, or just for their peace of mine, if they keep it in-house (this is my impression, as I'm not a loan officer or commercial lender).

Have you ever thought about just doing a HELOC so you could just access the mortgage, refinance the newly purchased house six months later, pay back the HELOC, and then have instant access to that money again? Might be a better way to go, if the new house you purchase is acquired at a discount, because you can offer "cash", freeing that money for an additional purchase, immediately? Refinancing constantly is a bit expensive and most require monthly payments immediately, which will increase your holding costs, if you haven't found a home to flip/rent immediately.

Theoretically, if your house appraises for $425K on the low end, many banks will give a HELOC based on 90% of ARV, minus what is owed on the home.

You will pay for an appraisal and some additional fees. But, the fees are not usually very large.  

Hope this helps!

-Scott

@Carson Belknap

What size of a mortgage is it? 

Luckily, I have my Dad and his network for this issue. 

If anyone needs a good rehab guy let me know, I am happy to refer my Dad (when he is not working on my properties, that is). lol 

Have a great day! 

@Andrew Scott

I am NOT from Penn, however, I am working with a company that does interest-only financing (in the 7's-8's- FIXED (30 yr)) portfolio loans for rentals, with NO seasoning period, meaning you can get your money out as soon as it is leased and rented, unless you want to base the refi on purchase costs. In that case, there are banks (mortgage brokers) that will help connect with someone who can do these type of deals (commercial lenders or portfolio lenders can as well, it just usually comes with some sort of adjustable rate). 

Again, I'm in the process with this company (RCD Capital). 

Information for the guy that I'm working with is:

Jonathan Surak

California Finance Lender 60DBO-76030

As soon as my financing is complete, I will submit an update to let you know if it is a scam or a good deal. The rates are definitely higher. However, you don't have to deal with adjustable rates (huge PRO for me- peace of mind), and they aren't bound by Fannie Mae rules, because they are portfolio lending (so you can get as many rentals as you want-100,200,etc). 

Looking through the repayment terms, I did notice there are pre-payment penalties. However, not a huge deal, since I could virtually get an unlimited amount of money from them, and unlimited amounts of houses (as long as I keep 6 months worth of payments (don't have to be seasoned) in my bank account for each refi that I apply for from them. Also, still waiting to hear how much their fees are for refi's, will also update when I hear about these fees.

Hopefully, this company is legit :) 

Good luck! 

I would ask for commercial lending departments if I were you or all you will here over and over again is the same ( "you can only have ten houses", blah blah blah, and seasoning period of 6 months) 

If you have any questions, feel free to give me a call. I have four properties (SFH) and looking to get much more aggressive in the coming months.

@amanda casto ... If it is only short term, why not go with the HELOC, as long as you only pay for what you draw (only option where you don't have to pay interest on the entire balance up front, and is interest only, allowing you minimal payments until you finalize and sell the flip, providing for the biggest cash flow of all the options.

A refi, you will probably end up paying for the total amount from day one, plus be stuck paying interest AND principle, and also the same costs that you would pay for anyways with a HELOC, but have less flexibility than a HELOC offers.

A hard money loan, even if it is in the 10's, you are only paying an actual, monthly interest rate of about .83% on the total (what will your timeline be?). If it will take six months, you will end up paying 4.98% interest on the total amount (.83*6 months). 

If it was me, I would and DO use the HELOC, because it offers the most flexibility for deals now and (if it is a revolving line), eliminates the need in applying for future funding down the line (some people will say that the adjustable rates can get you. However, not having funding for a deal, immediately, can also get you.) Also, usually the introductory rates are pretty solid (first year or so).