Lenders in Alabama: Prattville/Montgomery area

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Lenders in Alabama: Prattville/Montgomery area

Larry Smith
Rental Property Investor · Charlottesville, VA · Member since 2018 · 46 posts · 13 votes

Hello BP,

Possibly you all can help us out! We are interested in investing in the Prattville and Montgomery, AL area with the 30K+ we have saved. We have a realtor/PM in Prattville currently and she is great, but at this time she has not connection to a HML. She has introduced us to her lender, however, he is conventional and a worthy contact for a exit strategy. We have one property in Prattville already through the traditional route and want to be more efficient this time around with time and money. Thanks, BP any references you can offer would be big help.

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Joseph Back
Rental Property Investor · Montgomery, AL · Member since 2017 · 277 posts · 221 votes
6y

@Larry Smith Glad I was able to help. I am from Lexington and moved to Montgomery about 6 months ago. Lexington is a great market in that it has population growth, job growth and quickly appreciating properties but it is very difficult in that almost none of the deals there truly cash flow any more.

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  • Michael AtkinsBusiness Member
    Real Estate Broker · Montgomery, AL · Member since 2019 · 29 posts · 25 votes
    6y

    Hey Larry, I might look at opening some lines of credit with some of your local banks. In my experience one of the major factors they look at is cash on hand. One of the great ironies is that Banks do not like to loan money to people who Need Money Lol. They are more apt to extend a $10k to $50k unsecured line of credit to someone who has $30k in savings then to someone who has invested most of their savings. I would apply to a couple local banks and hopeful obtain a couple lines of credit. If successful you might be able to double your buying power.

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  • Larry Smith
    OP
    Rental Property Investor · Charlottesville, VA · Member since 2018 · 46 posts · 13 votes
    6y

    @Michael Atkins Thanks for responding! I have not thought of that, also allows for a smaller interest rate to pay back when using the BRRRR method. I'll look into that. When using a LoC for purchase, is this viewed as cash?

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  • Michael AtkinsBusiness Member
    Real Estate Broker · Montgomery, AL · Member since 2019 · 29 posts · 25 votes
    6y

    @Larry Smith - I write up LOC funded purchases as cash sales. My LOC's can be spent like cash and the bank generally sends me a check book once I'm approved.

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  • Larry Smith
    OP
    Rental Property Investor · Charlottesville, VA · Member since 2018 · 46 posts · 13 votes
    6y

    @Michael Atkins Great, working on that now! However, if you run across any HML you reccomend, I would appreciate it even if I never use them.

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  • Joseph Back
    Rental Property Investor · Montgomery, AL · Member since 2017 · 277 posts · 221 votes
    6y

    @Larry Smith I am a local investor in Montgomery and can tell you in general the banks in Montgomery are much less aggressive than in most markets. I own 18 rental units in Lexington, KY and have BRRRRed all of them with no problem getting refis from local banks there. The only lenders I have found in Montgomery that are open to it are Troy Bank & Trust and First Community Bank. Also, I don't know of any local hard money lenders but you should check out Lima One Capital, they are national but only have a $25k minimum which is much lower than most of the national companies. Hope this helps.

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  • Larry Smith
    OP
    Rental Property Investor · Charlottesville, VA · Member since 2018 · 46 posts · 13 votes
    6y

    @Joseph Back I does thanks! What coincidence you invest in KY. A co-worker and I were talking a few days ago about investors focusing on markets in KY and other locations. May I ask, why there versus Montgomery?

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  • Joseph Back
    Rental Property Investor · Montgomery, AL · Member since 2017 · 277 posts · 221 votes
    6y

    @Larry Smith Glad I was able to help. I am from Lexington and moved to Montgomery about 6 months ago. Lexington is a great market in that it has population growth, job growth and quickly appreciating properties but it is very difficult in that almost none of the deals there truly cash flow any more.

    1Reply
  • George DespotopoulosBusiness Member
    Lender · New York, NY · Member since 2016 · 936 posts · 287 votes
    6y

    @Larry Smith if you're hitting a loan amount of $75k then most HMLs will work with you. Anything under that will be tough. I would check out private lender link, it's a website that will come up if you google it. That's a database for "private" lenders -- it's mostly national HML but some may be local to you as well. You can search by loan scenario/criteria.

    If you're buying @ $68k+ (so your purchase price is $50k or more) and have a rehab budget @ 50% or less of your purchase price, then you'd likely be able to get 75% - 85% of purchase price funding and 75% - 100% of your rehab funded through a holdback. 

    MoFin Lending4.9152 Reviews
    WebsiteView Page
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  • Larry Smith
    OP
    Rental Property Investor · Charlottesville, VA · Member since 2018 · 46 posts · 13 votes
    6y

    @Joseph Back I spent three years in Prattville, stationed at Maxwell AFB, it seems as if we rarely met young professionals moving to Montgomery. Have you been looking in the Montgomery area?

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  • Larry Smith
    OP
    Rental Property Investor · Charlottesville, VA · Member since 2018 · 46 posts · 13 votes
    6y

    @George Despotopoulos I'll check that site out, appreciate it. The plan would be to purchase above that price point. At this point if I have to wait to to go all cash of my own, depending on the location, it may worth it. Though we are ready to get started. I have enjoyed my career this, but I really want to be a full time investor.

    Thanks everyone for all the advise, keep it coming!

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  • George DespotopoulosBusiness Member
    Lender · New York, NY · Member since 2016 · 936 posts · 287 votes
    6y

    @Larry Smith - if you use cash only, just understand there's a risk (however slight or significant) that your money can end up being tied up in the property. I've worked with investors that bought and rehabbed a property in all cash and then it doesn't appraise for what they expected and they're unable to refinance it. Or, they somehow or another had a slip up credit-wise and their score dips below what most long-term lenders want to see, which then disqualifies them from financing. 
    If you're flipping the property then it's not as much a concern. 

    MoFin Lending4.9152 Reviews
    WebsiteView Page
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  • Larry Smith
    OP
    Rental Property Investor · Charlottesville, VA · Member since 2018 · 46 posts · 13 votes
    6y

    @George Despotopoulos Highly noted!

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  • Matt Bailey
    Investor · Member since 2020 · 110 posts · 33 votes
    6y

    @Joseph Back Can I ask you who was favorable to work with during you BRRRR in Lexington?

    How long was the seasoning?

    Did you ever pay cash and then put debt on the property?

    I've called quite a few and haven't found the golden goose yet.

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  • Andrea Weule
    Investor · Member since 2020 · 324 posts · 278 votes
    6y

    I work with a bank in Montgomery/Troy, AL area.  Troy Bank and Trust

    They've been great and allowed me to finance via my LLC instead of personally.

    1Reply
  • Larry Smith
    OP
    Rental Property Investor · Charlottesville, VA · Member since 2018 · 46 posts · 13 votes
    6y

    @George Despotopoulos I would not be flipping initially, it would be a hold, unless the return on investment of a flip works out better than it being a rental.

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