Investor · Tulsa, OK · Member since 2008 · 154 posts · 54 votes
It seems just when the deals are getting really good the banks are all getting cold feet.
The last 2 houses I bought I did a home equity loan against my own house and paid cash for the properties I bought. They were 48K and 49K so the loan fees were pretty high for a small loan, hence the home equity deals.
Now there is not much equity in my own home to borrow against so for my next deals I am forced to use bank loans against the houses I will buy.
My credit score is good and the terms I am getting offered are 5.375% plus 20% down + 3.5 points.
I don't mind the down payment, but 3.5 points is way too high in my opinion.
Is anyone seeing better deals out there with banks for houses you will not live in? And no I'm not interested in hard money lenders with their 12% interest.
I am doing rental properties as I understand that business model the best.
Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
17y
Currently up toward 7% for NOO with one point. An extra 2.5% to get the rate from high sixes or seven to under 5.5%. Sounds about right. You may be able to reduce the points in exchange for a higher rate.
Ridgeland, MS · Member since 2009 · 106 posts · 0 votes
17y
20% down? Why not do a rate and term refi? If you bought them on a HELOC, you should be on title and there shouldn't be a seasoning issue for Rate and Term.
As for the rate, that is about what I am hearing around my neck of the woods.
Wentzville/St. Louis, MO · Member since 2008 · 359 posts · 1 vote
17y
Toben,
If you'd care to share more info about the city/state you live in and what cities you're investing in I can share my thoughts with you. I'm assuming that you have excellent credit and can go full doc. How many properties TOTAL do you own that are financed? There's probably some additional options other than conventional and hard money.
Adam,
That wouldnt be a rate/term refi. The heloc is on his primary home. So yes, he would be on title but there would be no lien on the properties he purchased using the heloc. He basically paid cash for the properties so they're free/clear.
If he tried to refi them it would be considered cash out which is restricted to 6-12 months based upon conventional guidelines.
Investor · Tulsa, OK · Member since 2008 · 154 posts · 54 votes
17y
I am in Tulsa OK and only investing in the local areas I know well as my strategy is long term rentals.
I do have A credit and a full time Job. I own my own house with a big note on it and own a duplex and a SFH rental that are both debt free.
I am buying properties at up to 50 times rent and don't mind putting up to 20% down.
The plan is to slowly add more duplex's and SF homes, doing most of the work myself and pocket all the money. After my 2nd deal closes I should have $2100 in rent coming in and a $650 monthly note.
I have been targeting REO properties in south Tulsa as rents are up and the market is getting flooded with foreclosures. You can buy cheaper in North Tulsa, but the rental market is very soft there.