All Forum Posts by: Bill Hamilton

When you have large cash flow (compared to your overall debt), rebuilding or fixing your credit becomes reasonably simple. It is not easy to fix everything but you can rapidly build up your credit score to a decent level. Get a secured credit card. There are numerous banks or credit unions that will do a secured card with pretty horrible credit. Buy a new car. Put 50%-75% down and finance the rest. Trust me, with that level of LTV they will do it. Try and get a card with Fingerhut. Very liberal with giving out a low credit line and if you use it, they will increase it. With a few of these lines of credit your scores will rise significantly in a limited amount of time. If you have a lot of recent, derogatory credit this won't always bring your scores up as much as you would like until time passes and some of these things fall off. There are lots of other factors and possibilities so don't take this as comprehensive.

For an FHA or Fannie/Freddie loan, bringing in P&L's etc may be requested but probably won't "sway" them. They have, as @Jeff Trevarthen said, worksheets that they will use to calculate your income. They can't vary from those guidelines. But if they are doing a portfolio loan they have a little more leeway. Or if you go for what is referred to as a non QM, then they have a great deal more flexibility. But with those, you are not going to be getting a 3.875% loan or anything close as a general rule. Take your info to a mortgage broker and let them run the figures as straight self employed. It might work out fine. If not, you need to find a broker who really knows the alternative programs that are out there.  

This can depend a lot on what type of deals or funding you are after. Flips or fix and flips require one type of loan. Buy and holds require another, and fix and holds require a hybrid. There are also loans to buy a fix to live in for a certain amount of time, then sell it and do it again. Each one has different credit score parameters and different LTV or ARV/LTV requirements.

I guess I am confused why you (or anyone) would think this is a deal that should be pursued. It sounds like it is almost certainly upside down and depending on factors that you don't know about yet, it could be in a position where the bank should be paying you to take it off their plate. Walk away. If for some reason you are still interested, let it go to auction and show up to bid (assuming that where you are that wipes out most liens). Or maybe I am missing something here. I am always okay with people pointing out why I might be wrong. It just helps me to learn.

Keep in mind that most Hard Money Lenders prefer to see to LTV be 60-65% and will stretch to 70% in good circumstances. The 75% can be done based on the rental income but they are going to discount the predicted income considerably based on occupancy rates, management fees and numerous other factors mention here many times. I congratulate you on getting this one done but keep in mind that some of your parameters are outside the norm. The good thing is that as @Bryan O. mentioned, the more of these you accomplish the more likely you can find other lenders who will give you more favorable terms.

I am with @Fred Heller. While condos can be a pain in some ways, the condo association owns the exterior walls which is where any damage is likely to be. Regardless, you are not liable. It's not like you live in a state where termites are unusual. Unless they can prove you knew, you had no obligation to disclose. How can you disclose something you don't know. If you have a lawyer, refer it to them. The only further communication with the buyer should be the fact that if she pursues you in court, your lawyer will countersue for all legal fees. And will win so she will just be out more money.

It might help for you to define what you are trying to achieve. Because "saturated" will depend a lot on what you mean. Are you trying to fix and flip, wholesale, buy and hold etc.

Most major lenders won't close a deal while the property is "under construction". All lenders look at any mortgage as a sellable asset. They may choose to portfolio and keep it in their bank but they might choose to sell it to another bank etc. the day after it closes or 2 years later. If a property is having work done on it, they have no way of insuring the work will ever be completed. If this was through a local bank, they might look at it differently but big banks don't play with this as a general rule. It's nothing personal but this is just an asset that might be bundled with 10,000 other loans and sold to Wall Street etc. If your loan has a flag on it for being under construction, then it falls outside the rules for resell and can mess up the whole package.

And @Doug McLeod types faster than I do. Same basic thoughts.

You may need to define more clearly what you mean by escrow. In general "escrow" is an account which is meant to hold funds until a transaction is complete or something along those lines. For instance a property manager needs to have an escrow account set up to hold funds such as damage deposits, which are not theirs until a tenant leaves and the landlord proves they have damages which need to be paid for from that account. If you are referring to escrow in terms of buying a property, and you want to know what the title company is going to charge then you need to get the netsheet from them. Those costs will/may include flood certs, title insurance etc. Unless you are referring to something else entirely.