I got a flyer from BR2 financing....

[Jaime Penix]

So I called them and they are telling my that they offer private financing for investor properties. The loan requirements is 75% LTV, minimal of 500k loan, and a minimal of 5 "doors". My thing is how am I going to get at least 5 properties under contract at once. It is tough for me to win one bid let alone 5 at once. I buy very select properties and with competing bids, I would think my careful buying strategy would be compromised. Maybe the terms are different and I am just not understanding them. Also the representative seemed a little turned off when I told him that I wanted to complete my 10 investment property quota with conventional loans, then entertain the this commercial loan opportunity. Then he mentioned that the loan would be under a business entity. So does that mean I will have to create a company specifically for the loan? There was not an APR listed. Also I did not see the life of the loan. Is anyone familiar with this loan and help me out. I guess I will have to call him back to get more details.

[Troy Whitney]

Hey Billy,

They aren't that high, not for private equity financing.  I just closed one 30 year loan with them on a refi at 7% and another at 7.5%.  Of course this is higher than conventional financing.  I recently refi'd my primary at 3.75%.  But the process with B2R is less painful and there are no limits in terms of how many properties you can finance with them.  That said - they aren't perfect.  It's hard sometimes to get someone on the phone, and they're pretty stingy on the ratios.  One property I have appraised for $200k and rents out for $2,300/month.  They could only loan me $145k on that one at 75%.  It was a little frustrating because I know that property is worth more than $200k, but then again, with more equity on my end, it'll cash flow better.  They will look carefully at both the appraisal value and the rental stream on any property you buy.  So B2R would never work in a place like Seattle (where I live), where a $400k property might rent for $2,500/month.  They'll only finance properties with good cash flow, which is the only kind of property I buy anyway (and why I don't invest in Seattle).  They will loan less than $100k.   I think they may go down to like $50k.