Obtain Loan for Cash Purchase

[David P.]

I am getting ready to purchase a rental property for cash through an on-line auction for $34000. However I want to finance it at current market value "Apprised Value" which is to be expected to be about $75K to $80K. Taking the lower of the two amounts $75K and with LTV of 80%, the loan would be about $60K. This would leave $26K for my next deal, if I can take cash out.

Some the research indicates that lenders are requiring "seasoning" for investment properties loans, meaning that I must be on the title for 6 months before I can finance the property. I am purchasing this property under my name, however I want to move it into an LLC for asset protection; would I then have to wait for the 6 months prior to financing the property?

Please note: I currently have 5 loans (1 home - 4 rental properties)

I know flippers/wholesalers do this with hard money loans; but I don't see how this is any different, except I want to keep the property for cash flow.

Any advice would be greatly appreciated and thank you in advance

[Jeremy VanBussum]

Good Question. I am considering doing the same thing. I have a property which I am purchasing for $27 cash and ARV is expected to be at least $40 with $3 in repairs/improvements. When I spoke my loan officer (who handles everything in-house), she didn't to seem to have a problem with this if I was going to reinvest the cash in another property. She told me it was a common practice. Find a local lender, develop a relationship and let them know your plan. Let me know what you find out.