Two Sources for Non-Conventional Financing

[Ursula B.]

Good evening everyone:

I mentioned in another thread that I found a credit union that would do business loans backed by real estate. Here's the thread: http://www.biggerpockets.com/forums/311/topics/123956

I've been asked about it a couple of times, so I wanted to give an update in the open forum in the event anyone else is looking for non-conventional ways to finance their deals.

The credit union is Navy Federal. I applied for a business loan on May 4. Today I got a phone call approving my loan for the following terms: 75% LTV, amortized for 20 years, 5 year balloon, 5% rate, 1% origination fee and appraisal required. I am refinancing two properties, one mortgaged and one owned free and clear. They are rolling both into one loan. Business loan with a personal guarantee, I was told it will not show on my personal credit report (skeptical but we'll see). They also approved a $10,000 credit card. I didn't apply for the card, but I guess I'll take it to build credit in my business name. I don't like the balloon but it's MUCH cheaper than hard money and I can have it paid down significantly in 5 years. This is an out-of-state loan. I live in GA, my properties are in NC.

While waiting on the credit union I also got the idea to check out Lending Club from @Dawn Anastasi. Applied for a loan, $20K, 11% for 60 months with a $1K fee. A 36-month loan would have been at ~8%. Filled out a short form, and one investor funded the loan in a matter of hours. Did an email, telephone and bank verification, still awaiting a word if they need anything additional from me to move forward. Not sure I will take this loan since the credit union came through on the business loan.

Hopefully this is helpful to anyone looking for non-conventional financing ideas.

Ursula