All Forum Posts by: William Fitzgerald

@JJ O. ,

The best bet is to look up all of the banks in that area and call them. All of my properties are in my LLC's name and with the same bank (Northwest Savings Bank). If you look up NWSB you will see that they have several branches that are all local to my area. They have a commercial lending division that takes care of my loans.

Instead of a certain number of loans everything is based on exposure. All loans totaling up to $499K in total exposure are reviewed by my contact and her boss. In this range it only took 2-3 weeks to close a purchase or refi. From $500k-$999k there are a few more sets of eyes that review the loans so it takes a few extra weeks. Once total exposure hits $1 million the board of directors have to sign off on it so it takes even longer.

For example, if I have $900k in total loans and want to buy a $200k house, I would be looking to have $1.1 million in total exposure so it would fall in the $1 million and over underwriting guidelines...

I know of a few of these banks in my area, but they are usually local so I would start by figuring out which ones are in the area you are looking to invest in and call around. Ask them if they do something similar. Hope that helps some. Good luck.

For my first property I took out a loan from my 401k, and my partner got a personal loan to use as the down payment for the property. We got a commercial loan for the balance of the purchase price. Within three months of purchasing the property we rehabbed it, got it fully rented, and refi'd the property. From the cash out refi we paid off the purchase loan, the personal loan and my 401k loan and used the remaining cash to purchase our next property.

Depending on the circumstances it can be a good use of funds, however, if you have no plan to or don't think you can quickly get the money back I would think about other options. Like the others said, you have to pay the loan back within five years. If you leave your job you have to pay it back in full in 30-60 days or face early withdraw fees. Also, most plans, mine included, only allow one loan a year so if you need to access the money for an emergency or something you will not be able to for 12 months. Just a thought. Good luck.

Glenn,

Welcome to the site. I live and invest in Southern PA but grew up in Woodlawn and work in Columbia. I know the pain of being upside down your starter home. My wife and I bought ours in February of 2007. The thing that is killing me is that the HOA I'm in doesn't allow rentals! We bought our house before I had the real estate investing twinkle in my eye. I didn't have a clue about real estate so I didn't even blink at the no renting clause... I will never buy another house again that isn't allowed to be rented. I advise anyone I talk with to do the same. Having that exit strategy is a huge benefit if you need it. At least you have that option.

We are currently touching up the place to sell it and cut our losses. I don't want to stick it out until the house value and our mortgage line up. I'd rather take the hit now and hopefully make it up in a fixer upper that we find for our next home. Best of luck to you!

Looks like Josh can use a new city on the Podcasts to give Detroit a break for a while!!!

Most of those houses are in war zones and some have been vacant for decades. Unfortunately I doubt there any diamonds in the rough being sold.

Here is the note for one of the listings.....

"NOTE: This property is too dangerous to allow interior inspection."

A shame though because I drive those areas every day for work.

No books were included. The format is hard to explain, but everything is done online. Its like a PowerPoint presentation with questions mixed into it. You have to answer each question correctly before being allowed to move forward on to the next subject.

I thought RAYAC was a statewide group, but maybe its just Central PA. I'm sure there is something similar in your area.

@Elisha Keller

I am like you. I am MUCH better learning in a classroom setting, but with my current lifestyle, the online class gives me the flexibility to do it when I can. You have 6 months to complete the course once you register. The class is extremely repetitive. Each session is repeated twice and you have to get 100% on all of the questions to move onto the next session. This style forces you to go slow and learn the material. It hasn't been an issue for me so far.

@Elisha Keller

I just started taking the real estate courses that you mentioned for the PA realtor license. I am taking them online and it was only $275 for both courses if you bought them together. I don't know that I would pay $300 for each course at the community college. Here is the link if you are interested:

Having a few rental units in PA, I am going to look into the landlord/tenant course that you mentioned though. Good luck.

Im in PA so I'm sure its different than Texas, but I had this happen to me over the winter. I had a tenant move in and said she put the utilities in her name, but I received two bills that totaled over $300. Her not having power in the dead of winter kept me from acting the first month, but after the second bill I said oh well. I called the electric company and they said that since I am the landlord they would stop billing me for the power starting that day and would present her with a 10-day notice to have the power put in her name or be shut off. About 15 days later she called me begging me to have the power turned back on because the electric company had shut it off... I told her it was out of my hands and she had to take it up with the electric company. She did and got the power turned back on. Now I tell the tenant they have to put the power in their name and make the call to the utility company the day they sign the lease.

The three weeks was: me sending them all my/my partner's financials, them reviewing it and telling me what I forgot, getting that info together for me/partner, resending it to them, them reviewing it, setting up a face to face, meeting with them, them taking a few days to decide, letting us know...

They are a local HML so it might not be that tedious with a national or larger lender but that is what I went through. Also, if you already have a nice deal I think that process would go a lot faster if they see it and like the deal.

Best of Luck to you as well!

I am sure it is different for each HML but I just got approved today actually from a HML. That was a three week process in itself. When I got the email from them saying they would work with me on a deal I asked them if they provided proof of funds letters. They said that it is deal specific and they do not generally give a blanket PoF letter.

Their reasoning is: if I use it to put in an offer, the offer gets approved, and they do not like the deal it then puts me in a very bad spot scrambling to find alternate funds.

I agree with you that it is a waist of time to run to them with every deal, ask them if they like the deal, and if so request PoF from them. But what are my choices....

I have yet to do a deal and this was the first/only HML I have gone to but I just thought I would share it since it just happened today.