Has anyone dealt with a situation in which one partner cannot secure credit funding or be approved for a loan? Just wondering how you guys thought to process this. My thinking is that we do a promissory note by the partner that cannot secure funding as an acceptance of debt and will still be liable to for the debt so we can include him on the title.
Rental Property Investor · Mebane, NC · Member since 2015 · 493 posts · 439 votes
3y
I don't know your complete situation, but my first though is to not move forward with this partner. If you need someone else to split cost I'd consider finding a replacement partner.
Why do you want to go into a deal with this person? What are they brining to the table that makes you want to work with them if they can't qualify for a loan? I'm not trying to be snarky, these are honest questions I'd ask myself if I were in your position.
I don't know your complete situation, but my first though is to not move forward with this partner. If you need someone else to split cost I'd consider finding a replacement partner.
Why do you want to go into a deal with this person? What are they brining to the table that makes you want to work with them if they can't qualify for a loan? I'm not trying to be snarky, these are honest questions I'd ask myself if I were in your position.
No absolutely Bryce! Thank you for the candor. This business needs hard feedback. So this person is bringing the cash capital and I am managing the business. I just wont be able to get him on the mortgage.
Rental Property Investor · Mebane, NC · Member since 2015 · 493 posts · 439 votes
3y
@Blake Breunle what's preventing him from getting on the mortgage? Maybe there's a loan product that will work for your situation and the lenders you've been talking to aren't aware of it. Maybe you can try to talk to those lender's bosses to see if they know of a product, or find a lender that's willing to work with you to tailor a loan solution to you instead of trying to sell pre-packaged loans. If credit is an issue maybe you can get a DSCR that uses the properties income to secure the loan instead of your personal income. If he can't on the mortgage due to how your business is structured a contract like the promissory note you mentioned may be the route to go, but I'd definitely consult with a lawyer.
The only thing preventing him is his current credit. We will be looking at doing a DSCR or Washout Refi when the project is complete. Yea, we are going to structure a promissory note for the time being after consulted with an attorney. Was just seeing if anyone had come into this situation before. Thanks for all the help!