Portfolio Loan Hack

[Ryan M.]

Hello everyone!

This is my first forum post as I have been a lurker for a while, but I just wanted to share that I got my first investment property under contract yesterday.  I was amazed at the way it worked out and I wanted to tell everyone about how I accidentally got a portfolio loan for my first property.  

I found a bank owned property that the numbers looked good on so I made an offer which I planned to finance with hard money or a rehab loan.  The bank liked the offer but countered back on the closing date.  The bank stated that they need to close within 30 days on the property before the start of the new year to get it off of their books.  I went back to the lender that I had planned to use and he said that there was no way to close within 30 days, so I called the bank's representative and told him that I was really interested in the property but that my financing was not going to work out.  That is when he asked me what loan terms I had been offered by my lender. I realized just then that he (the bank) may be willing to finance the deal to get it sold.  

In the end he was able to give me a portfolio loan on the property at 2.9% on a 1 year arm, 10% down, no PMI, and $600 in total closing costs. Also, I will be able to close on the property within 30 days as the bank is expediting the transaction. I do have to use my own cash for the rehab but, at 2.9% interest, holding costs will not be that bad.

I never would have had the knowledge to negotiate a deal like this without Bigger Pockets! Maybe someone else in the community can use this strategy as we approach the end of the year to get a good deal. 

Good luck to everyone,

Ryan Matthews