All Forum Posts by: Rick Barker

David, the expense of replacing a slate roof is the decking. A slate roof normally has spaced wood plank decking that has to be replaced with plywood decking for shingles. Did the contractor break down the quote to say what would be replaced?

Thanks Cheryl. After weeks of this one item at a time requests from the underwriter I had enough. I told them I wasn't going to change my lease and I'll take my business elsewhere. That got them moving and they waived the request. Hopefully (fingers crossed) I close next week.

Just recieved an email from the processor:

"Good Morning Mr. Barker,

I just received a telephone call from the underwriter's manager and she is waiving the request for the revised lease. She sent the file back to the underwriter to work on asap. I should have a clear to close for you today. As soon as I receive it I will give you a call. I will still need to send your loan through our audit process and once it passes we can schedule it for closing. The audit process takes up to 24 hours.

I apologize for the unnecessary confusion and stress. I hope we are still able to assist you in your refinance.

Thank you for your patience."

All is well, I hope.

Thanks for the replies.

Thank you Townsend.

There have been several items before this. This item is the final straw. We waited for 3 weeks just to get the deed/LLC transfer paper work from the title company to sign which caused the 60 day rate lock to expire. It has been one thing after another.

This has been the script for the last 3 months:
-The processor emails on a Monday saying the underwriter needs one more thing then we'll be able to close.
-I forward the item Monday night
-The processor sends it to the underwriter on Tuesday
-Underwriter has three days to review
There goes another week!

I have always had good dealings with this bank but this is the last. A good rate doesn't always save you money.

Not circumventing anything. The loan is going into our personal names. I understand that and have done it on other rentals that we have cashed-out. The bank set it up with title company to transfer it out of the LLC and at the same time set up the paperwork for us to put it back into the LLC. There is a 30 day hold before it can be done. THE BANK DID IT, no circumventing necessary.

Back to the original question I had which is what it has to do with the lease. I have never had to change a lease for the loan. When I have bought a property using financing that had existing tenants the bank never had me change the existing lease or approve the lease that I established once the property was purchased. If the bank has to foreclose on the property my lease will not help them evict the tenant and it definitely doesn't prove ownership.

Thanks for the reply.

I can understand that. We had to provide all our LLC paper work which lists only me and my wife as the owners. They know we are the owners. They don't need to have my lease say that. The lease is a legal agreement between me and my tenant.

Besides, I will put the property back in my LLC in 30 days per the title company and kill this addendum.

There are threads on BP that discuss whether or not landlords tell the tenants they are the owner of the property. I do not.

Thanks, Rick

Hello all,

We bought our most recent rental with cash and have been in the process of refinancing it for 3 months. Every time we think we'll close they come back and say the underwriter needs one more thing.

The main reason for my question is the last request from the underwriter. We are taking the property out of our LLCs name for the loan then we will transfer it back but the underwriter also wants us to do an addendum to our lease stating that the property is no longer held in our LLC and personally owned by my wife and I. They also insist that it is signed by our tenant. I have refused this request. If our tenant ever planned to fall down the steps this would be the time!

Anyone go through this condition lately? They said it is a Freddie Mac requirement.
Thanks

I don't know if this is too simple but I have one business account I call Main and then separate accounts for each property. I transfer the amount needed for maintenance for each property account into the main to make payments to contractors.
For example, when I have the HVAC systems inspected each year the contractor will charge $45 per property. I simply transfer $45 from each property account (noting the expense type for taxes) into the main account. Then I write one check from the main account to the contractor.

Mitch
If the doors are in good shape you should be able to buy new screen and spline and replace them.

The smaller banks will do a 80% LTV loan of the purchase price + rehab. The bank will do the appraisal for the loan based on the ARV using the repairs/improvements you state will be completed.