Its my ballgame and I control all the players

I am working to get some non recourse loans against 3 properties we own in Jacksonville, FL. So far, I have contacted most of the main non recourse loan players. Our 3 properties are owned inside of our Equity Trust Company Self Directed IRAs. So this has been fun.

We purchased each of our properties back in 2012, one for as little as $19,900 and its now worth $130,000. The other two are similar. One of the companies today said that the purchase price was too low. They wanted us to have purchased the properties at a higher price like $75,000. Say - what? Buy Low, Sell High has no place at the non recourse loan table, so it would seem.  Folks at First Western Financial were nice, but this was just odd. 

The one with the pretty form with letters N A S B, told me that "Unfortunately, the bank requires you to have at least $85,000 in actual cash in properties for us to consider them (no matter the current value). Since the purchase price plus renovation cost on all 3 of these appear well below that figure the bank would not have any interest." So buyer beware, make sure you have a high Purchase Price and high amount of renovation, because VALUE means nothing.

All the properties have been rented for the last 3 years. Solid growing rents.  I was told by Peak, supposedly a non recourse provider, "Your properties may be working very well for you, in your particular circumstances, and for that we applaud you......  The conditions that you and I discussed about not having the cross-collateralization ability is another factor, that is the part of being owned by a self-directed IRA...... Peak considers these as stand-alone loans, and for that reason, without a strong indicator from our location approval, we elect not to put capital at risk. Peak said 1 property would work in their Algorithm, but the other 2 would not, without any explanation as to why or if the planets were out of alignment. 

I am still reviewing options and am confident I will find someone who will work with us at lower equity levels for us to get some cash to buy more properties. Unfortunately the so-called experts for non recourse are really a bunch of time wasters. So make sure you have lots of time before you need the funds, these guys and gals will burn through your time. 

Until next time,

Jack