Obtaining a commercial loan while living overseas

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Obtaining a commercial loan while living overseas

Don Owens
Katy, TX · Member since 2019 · 13 posts · 4 votes

Hello BP community, 

I have a somewhat unique situation and wanted to see if any one had any experience or could offer advice on how to approach my particular situation.  For the last 3+ years I have been living and working overseas in the Middle East.  This expat assignment has given me an excellent opportunity to earn and save money and I have begun looking at ways to better deploy that capital beyond just the stock market.  Last year I purchased a couple of single family homes in the Mid-west for around $100k in total for both.  I paid cash for both and I have fantastic property manager in place and the homes are rented and providing a good return.  What I would like to do now is obtain commercial loan(s) on those properties so that I can free up some capital to purchase additional properties.  The issue I am having though is I can not find any leaders to work with remotely.  I was hoping that especially with what is occurring globally with the Covid-19 lockdowns and social distancing that banks would start becoming more comfortable with doing virtual loan processing, but so far I have not had any luck.  I also unfortunately did not have an already established relationship with any small banks before I moved overseas to fall back on and all my accounts are with one of the major banks in US, which could careless about tiny single family rental property loans.  Finally, I only make it back to the US for about 10 days out of the year around Christmas time and most of that time the banks are closed and I don't have the time to take 2 days away from family to fly down to where the investment properties are located.  So long story short does anyone have any advice or guidance on how to approach a situation like that?  Are there any forward thinking banks getting into this space?  I tried rocket mortgage but they seem to only want to deal with primary residence mortgages and not rental properties.  Thanks in advance for any help or advice especially if anyone has had success obtaining mortgages remotely from abroad and can share how they did it.

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  • Andrew PostellPro Member
    Lender · Fort Worth, TX · Member since 2016 · 8k+ posts · 6k+ votes
    6y

    @Don Owens 2 things here:

    1. Commercial Loans - commercial loans are practically non-existent right now.  All the commerical money is out keeping businesses alive.  This occurs whenever the economy shrinks like this.  They will come back but it might be several months.  Or if you do find a commercial lender...it might be REALLY different terms...and sometimes to different that it doesn't make sense to do it unless you MUST do it or face something else more terrible.
    2. Lower Valued Home - most lenders actually lose money when lending on a lower valued home.  I know it sounds a little crazy to say that but there are plenty of analytics that lenders have that show this is true.  So most won't lend on homes below $75k and some not even below $100k.

    So because of this you will likely only have the option of using Fannie Mae and Freddie Mac money currently.  If you think you can qualify for that type of a loan it might be something worth considering.  Oh, and every loan type will require a notary....so if you are living abroad, the embassy or US consulate is likely to be your only options for notarizing your signatures for closing...unless someone attached to you has their notary license.

    Probably not want you wanted to hear right now but that's the right information to have.  Feel free to ask anything else if you need.  Thanks!

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  • Don Owens
    OP
    Katy, TX · Member since 2019 · 13 posts · 4 votes
    6y

    Hi Andrew,

    Thanks for the response and a lot of what you mentioned lines up with my experience thus far reaching out to some of the banks in the few cases where I have actually been able to get a human on the phone.  I guess my hope was to see if anyone out there had heard of banks becoming more open to conducting loan services virtually/online especially in light of the Covid situation.  I would still be interested to know if any one is aware of any companies out there that are trying to do for commercial loans what Rocket mortgage is doing for primary home loans.  I don't have an urgent need to obtain the loans, but longer-term I am trying to see what options there are for me to obtain commercial loans while living overseas so I can add some leverage into the portfolio.  Otherwise I am just stuck as I am right now buying everything for cash as I have been.  As for the home value yes I know this is a challenge but I also know that in some markets this is more common.  I am aware of many people getting loans in this range in Indiana for rental properties, but usually through small local banks where they already have an established relationship.  I am also looking into trying to partner or work via family members as well to overcome this hurdle but this also brings its own set of challenges and complications.  Thanks again though for the advice and feedback and if anyone is aware of any companies doing commercial loan origination via an online model I would love to hear about it!  Thanks.

    All the best,

    -Don-

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