Investor looking for other investors

mbhomes · 02-16-2008, 11:10 PM

Hi everyone
im new to this site let me say i have found a good wealth of knowledge on the corporate credit section NICE. But not a lot with real estate especially investment properties.

I just closed on 3 homes (2 duplex's and 1 single family). they are owned free and clear with a market value (mv) of roughly 160k they are in indiana and one in ohio thats why mv is low. the single family is 3400sqft. So heres my question, i went to get a line of credit to fix these homes and purchase more. i was going to use the big house as collateral and this is what i was told "if the home is none owner occupied you have to hold title for minimum 90 days". WHY!!!!!

I have access and some connections with whole sale homes even 2-6 plex homes. but you need cash for these. now im stopped dead in my tracks until i sell the single and start getting the rent from the duplexs... errrr

ANYBODY HAVE ADVICE ON HOW TO SECURE FUNDS USING HOMES AS COLLATERAL.

I have been looking for a motivated hard working person to possibly partner with. If anyone is looking for the same i live in IN. Let me know

Hedwig · 02-17-2008, 12:48 AM

You can get mortgages on investment property. The rates will be higher than on an owner-occupied. I'd get a regular mortgage instead of a line of credit. You can put the proceeds in a money-market account and draw on it as needed. When you sell, you should get enough to pay off the mortgage, keep the funds that you have in the money market for your next venture so you don't have to mortgage every house.

I'd find a good mortgage broker and talk to him. If he doesn't do mortgages on investment properties I bet he'd know someone who does.

Loan Doctor · 02-17-2008, 02:12 PM

The reason your lender says that you have to wait on refinancing your N/O/O property is that normally when this happens the property is being "flipped", meaning you get a loan-fix up the place and sell it right away. Lenders will do what they can to stay out of this cycle. It is expensive to process loans, and only part of that expense is charged as lending fees. They want to make a profit and that seems to start at about the 90-180 day range.

Depending on your credit scores, you have two choices to raise funds. One is to take out a 2nd on your residence. As Hedwig said, this is the cheapest route. The other is to get a 2nd on your NOO property. In your case-and this is a rare thing that I suggest this-I would consider getting a HELOC (home equity line of credit) on your NOO, for the max line you can qualify for. They will require that you take out 10+K when the line is taken out, but you can use the credit line like a checking account. Once you have had this house for 12 months, then you can use that current value for your basis, until that time most lenders will only allow your cost plus provable (receipts) improvements.

Charles

mbhomes · 02-17-2008, 10:03 PM

thanks for your reply's i am going to my bank were my buisness checking is this week. I have consulted my broker and several other ones. They cannot put a mortgage or line of credit on it. unfortunatley for me i have all my realestate mortgages on my personal credit. My debt to income ratio is not bad since my rentals wash away the mortgages. my credit is good/ok. with experian i have a 728 but the other 2 i have like 660-680. My only downfall is a bankruptcy in 2002. im really starting to get worried that lending institutions are percieving me as becoming over extended. which is far from the case, im doing better now than ever, but if i cant get the loans i need i might be in trouble

Hedwig · 02-18-2008, 01:03 AM

If you still have equity in your house, you should be able to get either a second or a home equity loan on it with those scores.

Hedwig · 02-18-2008, 01:07 AM

You also might want to look for venture capitalists if you're going to do this as a business. I'm not sure where to find them, but I know they're out there.

Another source might be SCORE, which is a group of retired corporate executives. They are a non-profit group and offer free advice.

Go to SCORE's Website and you can ask for advice via e-mail. You can also find out if there is a chapter near you. If so, you can go and talk to someone in person. They may have some tips on how to get financing.

Loan Doctor · 02-18-2008, 10:45 AM

I would suggest that you keep asking around. I would start off the conversation with the other brokers "do you do a lot of investor-Non owner occupied" loans. Most brokers shy away from the more difficult to do loans, like NOO, FHA, FHA Secure, etc.

Your DTI (Debt to Income ratio) may not be as you think. Rental income is counted at 75% of what you are getting/what the market will bear, and 100% of expenses. Your scores are good enough to get at least 65-80% LTV (Loan to value-the % of the value/sales price you can borrow). The other things that lenders are looking for that may be a problem is length of time you have been in the real estate business.

Charles

mbhomes · 02-18-2008, 12:05 PM

thanks guys sure do appreciate the advice. I will keep trouping on. due to the good advice in the corporate credit forums, i have listed my cell phone with 411 under my buisness name and applied for my DnB number to start the buisness credit that i so desperatley need. right now there is 4duplex's 3 4plex's and 5 3plex's that is availiable now all for under 10k each.. but i already spent my 27k cash and now im broke.. i usually take things slow and carefull but i see agreat opportunity in todays hard times to boost my buisness 12years ahead of schedule. hell im willing to take on hard money lenders but most of these ive seen are very short term loans and that can be severe trouble. take care all
brian