Is there any better financing options out there?!

[Michael Dupree]

I am a new LLC in Central New York. My goal is to flip and sell house but, I'm having trouble obtaining financing. I tried We Lend LLC but due to me being brand new in the business the guidelines where very hard to meet on which property they will lend on. I tried my bank but they won't do it until I have 2 years in the business! Does anyone have any advice or help for me! It would be greatly appreciated!

Mike

[Andrew Postell]

@Michael Dupree you have some good responses already but a couple of other things here just in case:

Generally speaking there are 2 main types of loans for investors: “Conventional” and “Portfolio”

Conventional - I'll define these as loans that come from Fannie Mae and Freddie Mac (if you recognize those names). These loans are all 30 year fixed rate loans. They have the lowest rates we can find and since they are 30 year fixed...they allow us to cash flow better...which helps us qualify for other loans later. The draw back to these loans is that they are more paperwork heavy than the other "portfolio" types of loans....but if you have ever received a loan on your primary home, it's likely that you will go through the same type of paperwork here with conventional lending. Fannie/Freddie money = Fannie/Freddie rules. NOT the bank's own money.  THIS is the loan type that needs the 2 years of self-employed income but they can still use your normal job to qualify you.  Property in your name with this loan type.

Portfolio - I'll define these loans as loans that come from the bank's own "portfolio" of money. Sometimes referred to as "commercial" loans. These loans are a lot more flexible than "conventional" loans. Bank's money = Bank's rules. If they like you, then maybe they will lend to you. But since there is a limit to how much money the bank has access to....their rate will be higher...and usually a shorter term. The most common portfolio style loan in Texas is a 20 year adjustable rate loan. These loans are easier to get but the terms are different.  These are the loan types that don't care about your income....but keep in mind that EACH lender will lend their own money differently.  Some may only lend to gas stations.  Some might require THIS but others might require THAT.

So generally speaking if we need the portfolio loan route we need to lean on OTHER real estate investors in our area.  They already know who the good lenders are in this area (and maybe in conventional area as well).  

If you know that you need a portfolio type of loan but just need it in a specific state try posting in that state forum. Bigger Pockets has some great state forums and usually there are good locals that monitor those. Also, try some local real estate meetup groups. Meetup.com is a good resource for those but some of the groups will also post here on Bigger Pockets Marketplace too. Even facebook might have some good local groups for you. But post locally for this. That’s the best bet.

Anyway, hope this helps a little more.  Thanks!