All Forum Posts by: Alex Bekeza

I just finished a refinance for a foreign national client in Texas. It really wasn't as difficult as I anticipated at all and the only thing lenders will usually tell you is that a foreign national will need to have at least 30% down. They don't offer greater than 70% LTV to foreign nationals from what I've seen.

Luckily, my recent client had already been in the U.S. for many years and had plenty of credit/business history.  Depending on how long they've been here a lender may need to see credit/biz history from their home country as well but maybe not in this case since you say they already own property in ATL. 

@Samuel Pawlitzki@Brian Rowles

Hello Brian,

Congrats on getting your ducks in line and being so close to pulling the trigger.  I'll say that there are some better deals out there.  

For example, I work with one lender who will offer 75% LTV on the purchase price (NOTE : sometimes hard money lenders will require first time investors to stay at 70% LTV) plus 100% rehab so long as the total LTV does not exceed 90% of the purchase price. They'll offer interest only payments in 1 year, 2 year and 4 year options with rates going from 8.5% - 12%.

3 points is pretty standard for a deal that small UNLESS a broker wants to hack off a half a point or so to help out a first time investor who they believe in and want to work with long term.

As far as all those lenders throwing money at you haha One of the biggest problems I see is loan officers wasting peoples time by acting so stoked on every deal they hear about and taking investors into the process without doing DUE DILLIGENCE. 

Its important to find a broker who will be very inquisitive of all the details of your deal up front.  Don't take this the wrong way!  If they are good at their job they are trying to find any potential hurdles to closing before taking a single cent of yours for appraisals, credit reports, etc. 

@Samuel Pawlitzki@Andrew Poitras

Congrats on the early success!

With the little that I  know simply from your post I would advise you to only put down the minimum 3.5% for your primary residence.  I assume this is a multifamily unit that you will be renting out portions of...

If done effectively, your tenants will pay the majority of your mortgage.

Your going to want to leverage as much money as you can for the third property (the true "investment" property in the sense that you will NEVER occupy it.

Having concurrent mortgages will not be an issue.  Figure most investors don't own their primary homes out right without a mortgage.  As a matter of fact, responsible history reflected in your mortgage statement will HELP you get financing for that third property.

What I can tell you is that you won't want to drop the full 10% on your FHA primary because even with your successful first deal your experience is not going to circumvent you from needing to put down 25-30%.

I work with hardmoney and private lenders who will finance investors without calculating Debt to income ratio so long as you have the right down payment and strategy.  

Feel free to direct message me if you'd ever like me to shop some rates for you.

I hope this helped a little bit.  

Hello @Gregory Evans, this sounds like a really interesting deal.  I once lived in an apartment complex which was really just two buildings across the street from each other with the same paint job and owner with a small shared community outdoor area.  In other words, seems like a unique way to increase the value of the two buildings by consolidating them as one entity.

So of course first you'll want to find a real estate attorney with experience specifically in deals where the seller holds the note.  They should have no problem drawing up specific terms of the deal to present to the seller.  Not sure what town this property is in but you can just call that local County Tax Assessor and they should be able to give you all the numbers on that.  

As far as other closing costs, THIS could actually be your leverage!  You will both save big money because their is no loan origination fee, no escrow fee, however you will need to work with a title company too formalize whatever your attorney draws up.  Also, the seller may require specific types of insurance to protect themselves but ultimately another bit of YOUR leverage should be that he will have the opportunity to foreclose on you if you don't meet your end of the deal.  

So for your leverage:

-seller avoids some closing costs (YOU actually save a ton of closing costs..)

-seller has the ability to foreclose on you and keep the payments you've made to that point (and the property he would potentially be repossessing would be totally upgraded on your dime

-seller receives steady passive income which may be very attractive to someone that age

As far as other leverage, the most important thing to do would be to find out more about HIS needs.  You can try to find out his goals and shape the deal to help meet them.

I think you could actually get a better idea of how this would work by checking out some of the bigger podcasts videos I've watched recently regarding mobile home investing.  It tends to work similarly where you buy and sell for payments because traditional financing is not an option just like in your situation.  One of the podcasts I was referring to was episode 208 with Jack Baczek as well as anything John Fedro has put out.  

I hope this helped a little.  

@Rachel Stewart @Samuel Pawlitzki

If your lender told you an LLC can't buy residential property than that must be a law specific to your state. Maybe consider property in another state? OR he may have meant that you just cannot live in it, because that would be misuse of company funds.

Thats ok though, but you should meet with an attorney/tax professional to set up a partnership agreement.  They should be able to draft a simple agreement between you and your parent stating each of your roles, individual taxation, level of ownership, and investment, etc.

Sounds like you have enough money to make a great investment purchase.  Your only problem now is the legal framework.   I can give these bits of advice and thought but ultimately you'll need to get a legal professional to get all of your answers. Only a lawyer can offer the advice you need so maybe make another post looking for a good referral in your area.  Good luck! 

@Samuel Pawlitzki  

Hello Rachel,

Unfortunately, You can only use down payment gifts to purchase a primary or second home, but not for an investment property. With FHA loans, you can only use gift funds for a primary home. That being said, it seems like your best choice will be to purchase this property in partnership with your parents. Perhaps you should form an LLC which you own equal parts of.

As far as how seasoning works in general.  Say this was going to be your primary residence, all you would need to do is provide documentation that the money was properly seasoned in your parent's account before it was gifted to you and probably also provide details of the transaction which moved it from their account to yours.  I hope this helps!  Don't get discouraged, unless their credit is going to kill the deal you should just partner with them on this property and then if there comes a day when you should refinance you can put the new loan under you if you financially qualify at that point in a couple years.

@Jamie Brayton , @Samuel Pawlitzki is totally right. Working with a bank over a broker really sets a limit on the type of client-first customer service you can expect.

Besides the fact that we have access to WAY more loan programs than a banker does simply because we work with DOZENS of lenders of all different types. One simple fact will explain it all. Guy at the bank is on a salary, broker is not. We don't get paid a cent unless a deal funds. That being said, you can bet we are working around the clock and using more creative (maybe even pushier) methods to get the info on behalf of the client. When in comes to an investor like you, trust me, a broker is going to be doing whatever they can to build a long term relationship. Having a broker you can trust is essential to being a successful, savvy investor.  The best brokers really shepherd you through the financing process and do most of the hard work for you.  

I'm going to private message you someone I would recommend.