All Forum Posts by: Account Closed

Be carefule here - many are saying that you can get 75-80% on the refi but that is typically for a 1-2 unit. On a 4-plex, I've found it to be closer to 70%.

United General Mortgage ugmc.net I think specialized in them back in the day. Not sure if they are still around...

Unfortunately most HELOCs are going the other direction - like lenders reducing or shutting down the line completely.

How about a business line of credit? If you have an LLC that is seasoned, go to your local bank and ask. Usually under $50K there is minimal qualifying. Just don't tell them you are a real estate investor. :lol:

I just got a flyer from Eastern Savings Bank and it said they are still doing foreign nationals. I'm not sure what their min loan amount is but they are a portfolio lender so they can be flexible. Kind of expensive, though...

It usually defaults to the lowest common denominator. So you won't get a benefit from using your friend. I would use him as your sole guarantor and create an outside partnership that spells out how you share profits.

Couple of problems here. First paying cash and then doing a refi within 12 mos you are right, it's an unseasoned cash out refi, and the banks will hate this.

2nd - it's not the appraiser you have to worry about - it's the field review appraisal at the lender. What we are seeing now is that the banks are insisting on using foreclosure and REO comps as sales comps and slashing the value like crazy. There is no way to control this or know in advance if it will happen.

My advice is record at closing a 100% note/deed of trust or mortgage that includes all your repair costs. It will be a rate and term refi if the entity is not yours and you'll be able to recoup all your money since you should be buying at no higher than 70% ARV and you can refi at 75%+. Make sense?

I disagree. Wrap mortgages are great. Essentially your existing financing is 1st position, your equity portion is 2nd position and the borrower signs two sets of docs at closing. You can service yourself or outsource it. A local atty can help you prepare the docs.

Because residential sucks right now. There's no liquidity in the markets for low doc residential ooans.

In commercial, the property qualifies. If you have enough income to service the debt at a ratio of 1.20+ then the borrower (sponsor) is secondary.

If you're soliciting local guys it can be done but make sure you don't pool the money and make sure you get a broker involved so you are compliant with disclosures, usury, etc.

If you are pooling the money, that's where the SEC comes in. You usually have to be licensed and you'll need to register a private placement with an exemption such as a 506 (d). We just did one in our market and it was about $10K to set up not including the servicing software at another $12K. Plus, there are caps in accepting retirement money, strict rules about advertising AND your investors must be accredited. Not easy or cheap but it can be done.

I usually suggest starting with individuals and not pooling but I can't stress the importance of getting a broker involved enough.

I'm not going to attack your equity or investing strategy :protest:

The problem is that FNMA has a rule (and they are really the only ones buying anything in the secondary markets these days) that says you can own a max of 10 properties. Actually you can own more but if you have 10 mortgages reporting to your credit, that's the kicker.

I advise my clients to do a couple of things here.

1) if you have a 30% equity position, refinance into an LLC loan. If you originate the loan in the name of your entity, even with a personal guarantee, it will come off your personal bureau. Peel off the ones with the most equity and try it.

2) Approach a local portfolio lender, like a credit union, and see if they will offer you a blanket loan to refinance all the properties into one loan. They will underwrite it like a commercial loan so they have to cash flow usually at a min 1.20 debt coverage ratio. Again, they may cherry pick but it will give you some room to work in the meantime.

Good luck!