first invesetment property

[Alex Wang]

Hi guys. I'd like to introduce myself really fast. I just recently heard about this site from a friend. I have been reading a lot of books on real estate investing for the past 6 yearsand even took a rich dad personal coaching course. I just graduated from Rutgers Newark in Jersey and am looking to be a full time real estate investor. I just bought my first 2 unit house right next to my school with a loan from a family member since I could not get a mortgage. The house was paid in full and i got a sweet deal for it. I have been eyeing the neighborhood for quite some time and I believe things couldnt have worked out better. The property has 2 3br 1b units and also a big basement which i am in the process of turning into a 2br 1b apartment. So far this place is generating a little over 3,000 per month. My dilemma now is this. Since the house is fully paid off I have been trying to get a home equity loan so that I can buy another property but since i havent been able to show personal income for past couple years because I was in school, I cant get a loan. what should my next step be?

by the way I just bought the house in december of 2012. I transferred the deed to an LLC ( which now makes any loan a business loan).

My vision is to buy 3 to 4 multi family investment properties before buying my own home and starting a family.

Any advice would be greatly appreciated. Thanks

[Lynn McGeein]

Alex, your best bet is probably to find someone who will cosign for you, if that is an option, although not sure how that works with the LLC.

We considered an LLC in 2008, an attorney and many real estate books recommended it, but after speaking with several different lenders and our current mortgage companies, we decided against it. It is much more difficult to obtain a loan or refi and terms were not as good as conventional options if property has been transferred to a new LLC.

[Nick Lodowski]

Alex,

Congratulations on your first deal. I really think that's the hardest one. I'm sure you have learned so much already just by jumping in and getting it done.

I am a mortgage officer for a large lender and we don't touch LLC's. Often times people have to take the title out of the LLC, get a mortgage (when they can show income) and then put it back, but I would not recommend that. I would look to hard money lenders or better yet, go back to the relative that was willing to lend you the initial money, show them you can be successful and give them a great rate of return.

[Ankit Duggal]

Alex Wang congrats on finishing school and getting an asset in the Unversity Heights neighborhood. Here is my recommendation:

Go to a local lender like City National Bank, Oratani Bank, and/or a community bank. Create a loan package and request a loan to have the following parameters:
1) LTV at or below 50%
2) DSC north of 1.30

That may convince a lender to give you an LLC oriented loan.

[Alex Wang]

Hey Ankit. Were practically neighbors. We should bounce some ideas in person some time

[Min Oh]

Alex Wang as Nick and Ankit mentioned, a local bank or hard money might be your best option. Two other local banks you might want to try, Signature Bank or Sterling Bank. Hard money will be more expensive but if you're interested, just shoot me a message.

[Alex Wang]

thank you everyone for the response.

[Brandon Turner]

Hey Alex Wang welcome to the site! I'd definitely recommend listening to both the 6th episode with Arthur Garcia and the newest one, with Ben Leybovich, of the BiggerPockets Podcasts! for tips on creative real estate investing.

Welcome!