All Forum Posts by: Ben Harvey

 Yes, commercial will take into account credit, maybe consider a partnership with someone with good credit, or try building up the credit again. 

Great breakdown from @Nathan Gesner. 

The way I learned is equity in your house is "money in your walls." A HELOC is like a credit card that allows you to access the money in your primary residence to use for another use. Typical uses are to pay off credit cards or car loans, and many investors use these to purchase more real estate!

With that being said, a HELOC is in second position to your 1st mortgage, meaning when you take a HELOC out on your primary residence, there are two liens on that home. Your 1st mortgage (typically the big one) and your 2nd mortgage (HELOC).

Talk to your local mortgage broker or credit union on their options, there are lots of them out there! 

Good luck 

 Sorry, I should have been clearer, the 5% is for primary residents only! That's the homestyle renovation loans I mentioned a little later in the post. 

Good goal! I can see why you'd want to do income route vs market value right now, bummer that it's a tough one to find! 

Sorry, I should have worded it different. The 5% conventional is for primary residence only! 

Totally agree with this advice from Nick! 

In addition to his last comment, you can go with the 10yr/25yr am and either keep the fixed rate when it adjusts or refi/sell it when the time comes or before the adjustment period. OR there are commercial lenders with 30 yr fixed rates where you can "set it and forget it" if you are looking to keep it long term. It is a higher rate but if you're comfortable with the numbers, it could be a good option. End of the day, it's personal preference of what you are looking to do or how hands on you want to be with the financing.

Good luck!  

 No worries! If you don't mind me asking, what's your end goal with the refi of the portfolio?

 Lenders underwrite with this question in mind, "what happens if I [the lender] absorb the property." So, they are careful when it comes to rural towns because of the risk of that market going up or down. For example, an investor I worked for required the town have a population of > 25,000 people OR be within 25 miles of a town with > 100,000 people. For them, rural is the risk if it's going to grow or not, ultimately if they have to absorb the property, are they [the lender] going to lose money on their exit strategy. 

Credit unions, local banks are great options!

Hey @Nicholas Devlin, I agree with @Andrew Garcia approach, but would consider the blanket loan option if you're looking to keep these properties long term. A couple of things to consider though about the commercial blanket.. 

1. On a blanket loan, the investor (lender) will appraise all the properties individually to get your total value, your LTV will depend on what those value's all come in at and if your portfolio cash flows (or debt services) positively. You may be required to show income and expense documentation for those rentals as well.

2. With blanket loans, all properties must stay under the umbrella of the loan for the entire time you have the loan. In other words, if you had 10 properties under the blanket, you could not sell one or refi one individually, you must refi the entire portfolio to remove that one from the blanket. If you are not sure if you want to keep all properties for that term, it may be worth keeping your individual loans on each of the properties so you're free to do with each property what you'd like. 

Hope this helps! 

@Kenzie McIlvoy - like many people have said, terrible advice by a realtor. Dump and find a new one. Sounds like he works with some grey area'd folks and it will come back to bite them some time. If you were to get caught in mortgage fraud, along with your broker or LO, you could be liable for major fines and even jail time... not worth it. The "happens all the time" is your agent desperate for a deal and walks a little too close to the edge.

There are conventional loans out here in Texas that will allow you to do 5% down, sure it's a little more down and you have MI, but it'd be better to be there than prison! lol. 

You could also check out fanniemae homestyle renovation loans (owner occupied) or fix/flip loans (investment) that have some pretty flexible terms to them and can finance a portion of the renovations. 

As the book "Supernatural Business" says, "Best to do business with integrity!" 

Good luck