Private Lending & Conventional Mortgage Advice
Market News & Data
General Info
Real Estate Strategies

Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal


Real Estate Classifieds
Reviews & Feedback
Updated over 10 years ago on . Most recent reply

Commercial loan...The bank said nooo!!!!, What?
OK, BP, I need some options. I'm frustrated, but will keep it moving!!! Any insight or suggestions...
Requested commercial loan to refi 5 SFR(50K each)..small 15K private on each, seasoned in Business Name, 60-65LTV,5.75 20yr amortize..All cash flowing with tenants..credit mid 600's(4 properties on personal), wanted funds to reinvest in RE, pay company truck off
Bank..need higher score,reserves, > leverage, < liquidity, global jargon, below break-even ..blah, blah, blah...will consider with guarantor(high score, income)...also counted all residential debt against me except personal residence(3 properties in both spouse and I)
Unlimited Property..established 2005 single member LLC, proven record, over 20 SFR, more than half free and clear, reinvesting with reserves while prices low >20% returns instead of leaving funds in the bank for 2%, full time investor(no high paying w-2)..
#1-reason I requested the loan(restructure debt/reinvest in RE...If I had 50K reserve, I wouldn't need a bank loan
#2 It's a secured loan...
1.What point can the LLC stand on it's own?
2. Should I consider selling some of my notes to raise capital?
3. What did you do when the bank said noooo??
Most Popular Reply

Hi Rolanda! I'm not sure I got all of what you were saying in your initial post, but it sounds like you have 20 properties and are looking to refi 5 of them? If that's correct then I'd think I would agree with the bank that you need a fairly hefty reserve fund. I sure understand your desire to buy while the buying is good, but, having been caught in the low liquidity trap myself in the past I can tell you, it's not pretty. So your comment (#1 If I had 50K reserve, I wouldn't need a bank loan...) caught my eye because 50k is only $2500 per property, and that's not exactly a huge reserve. Did you ask this lender what they WOULD like to see in terms of reserves?
I have been working on re-training my thinking so that instead of seeing my reserve fund as a "lost opportunity" I see it as 1) a cost of doing business, 2) an important element when presenting myself to lenders, and 3) a stress reduction investment.