All Forum Posts by: David Ross

@Jerry Padilla 

Good intel.   

@Brian Rodriguez 

This is the type of scenario where you're pretty much at the mercy of the underwriter (or their supervisor, etc.)   In my opinion, you don't have a lot of ammo to fight this battle so to speak.  I'm surprised the title company isn't balking at it as well.   

Based on what you've said, it seems to me that there are really only two solutions available:

See if he can get the city/county to give an exception on allowing him to continue to be grandfathered in to the old building requirements and then getting the boundary line adjusted.     
If that's not possible with the city, his only other option is to adjust the boundary line and be willing to meet the city's new building codes.  

I think you can be fairly confident in the fact that he's not going to get the money from another lender so really the ball is in his court on how he wants to proceed if he wants the financing. 

Good luck!

You won't get a "vanilla" Conventional loan with the property being held in an LLC - you'll be limited to more niche type programs (such as the DSCR mentioned above). Erik makes a solid point that the gap between a vanilla conventional loan (on an investment property) and the DSCR loans is closing though - so for the time being, it's not too big of a cost difference in many scenarios.

Seems like solid advice above.   If you have some money in the bank to cover unexpected circumstances (vacancy/repairs, etc.) and you know that you're going to struggle to put together the down payment for a multi-family, then beginning to build up some equity, experience and momentum (by taking action) isn't the worst idea.   Obviously it would be better if you could find something that gives you more cashflow though.  

If you're going to be stretching financially and don't have the reserves for surprises down the line - it's not worth the risk just to begin building equity.  

Welcome Bill, you'll find all kinds of helpful folks here.   Better late than never!  

Tough one - have you chatted with the title company to confirm they're going to issue clear title with the proposed easement?

Loan officers are typically only able to be licensed with one entity and if they're brokering loans to an outside investor/wholesaler - it's pretty standard practice for the loan to be registered first with whatever entity it is where the MLO hangs their license.   For the most part, it's also pretty standard for the loan processing to happen in-house (i.e. wherever the MLO is licensed).   Some larger broker outlets will give the option to have the loan processed and underwritten with them but this isn't the norm (UWM comes to mind as a big lender who now gives the broker this option of taking care of all of the processing or certain aspects of the processing which they call "processor assist" - this is fairly unique as far as I'm aware however).

There are so many little variables to every situation but generally speaking, if an MLO is skipping over the spot where his/her license hangs and taking a deal somewhere direct, there wouldn't be a compliant way to pay the MLO.  

Quote from @Jay Hurst:

Good catch there Jay - can't forget the rental income!   You're absolutely correct.

A small detail to keep in mind to anyone running these quick calculations by hand on their own:  it's important that $50/month is added to the total monthly expenses (as Jay showed above), as opposed to subtracting the $50/month from the total income which we sometimes see.  

At first glance, it might seem like adding $50 to the total debt versus subtracting $50 from the total income would be essentially the same thing (or "close enough").   In this scenario, if we do the math by subtracting the $50 from the income, we end up with a debt ratio of 45% instead of 48% ($430/$950 = 45.26).   That ~ 3% difference could change the scenario and the options available quite a bit!  

Well done, they say the first one is the toughest - all downhill from here!  :)