All Forum Posts by: Brian Garrett

I do no income purchase and refi loans all the time.  The lenders I work with only care about credit score and property appraisal.  You pay a higher rate but way less than private and hard money.  30 year terms too.

If you have done any kind of sales, you know that it is much more profitable to FIND those that are already willing to buy your product, rather than convince someone who is reluctant that your product is worth purchasing.

Now, as mentioned above, finding someone with loads of money and working a deal with them would be great. But it also can be really difficult. How many people do you know that want to invest and don't know how? Or aren't sure where to put their money? What if you were willing to pay a little higher interest, say 8% and you built your own lending group. You offer anyone and everyone a chance to invest, as much as they are willing. Their contribution ratio to project cost, would also be their percentage of return in interest. The more they invest. The more they could make. If you do it right, everyone comes out on top, no one has to fork out loads of money, and you build a portfolio of not only homes, but also lenders.

It would take a bit of work. But you seem motivated enough to make things happen.

I have a number of scenarios, doing deals with family members, and doing deals with non family members. The essence is pairing up those with income to show but cash poor, and those cash rich but no income. I'll explain.

I was fortunate my mother in law was fascinated with real estate. She and her husband were super savers, and with the death of her husband collecting his life insurance, 30 years ago, had over half a million cash, a good sum back then. She had a small pension, but basically in the same boat as those with lots of cash, but not much income to show.

At the time, my wife was a finance company VP, me a programmer, a field that pays well, and my brother in law, a doctor. What she proposed that we all partner up, she with her cash, and us with our good incomes, excellent W2's, and together we make offers on properties. She proposed the same deal with my brother in law. We, the kids, each contributed cash as well. So, with her, we picked up several properties in NYC in the early 80's. Similarly, she did the same deal with my brother in law in San Francisco. Both areas experienced dynamic appreciation since, and working together, we all manage to acquire properties before the market bottomed out in the mid 1980's, then rode it to the next peak.

One other benefit working together as a unit is my wife has her name on some of mom's bank account. So in some cases, with deals that we do ourselves, at auctions for instance, they ask you, do you have the cash to complete the transaction, we show them the joint account with mom, and we're good to go. Also, some want to see if we had the cash for a number of years, aged, which mom's account do show, going back 10 years, and not some recent deposit.

Then, I found a creative realtor looking for a partner to do deals. So if they seller wants to know if the deal can be completed, I'm there to say I'm the income partner with W2's, tax returns to show. If they want to see where the cash is coming from, I got mom's statements to show. The partner and I just split the profits from the deal. 

Doing deals this way does sometimes present hilarious consequences. In the mid 90's I was refinancing a few of my rentals, 2 of which I partnered with my MIL. The bank wanted paperwork for my MIL, got it, and found she partnered with my brother in law in San Francisco doing deals. So they want his tax returns. Turns out he partnered up with some other doctors doing deals as well. While I was discussing how long it's taking with our loan officer, even she thought it was getting ridiculous, because by the time they're done, if they ever, they'll wind up checking out 50 different people, maybe 40 doctors.

Fortunately, I have a Wealth account at my bank, and they wondered why we didn't go to them first. They already have info on us, so they said just get us updated tax returns, and W2's, you're go to go with us. We'll leave your MIL, BIL, his partner doctors out of it. We'll just consider you, and you alone.

So you'll have to find a way to market yourself, you're the cash guy willing and able to do deals. 

 Do what I do and use other people's money. 

You can buy "Subject To", rehab, Sell, rinse, repeat, or buy "Subject To", Rent, rinse, repeat.

Or, find a doctor, dentist or businessman with lots of cash to invest and pay them an interest rate you are both happy with. No bank, no credit needed. It has worked in all markets for me for the last 20 years. Before that, I was a loan officer, so yes, I can qualify for bank loans, but why do that when my way is so much more profitable? Ken

6-8% really isn't bad, "regular" banks are offering 5-6% on 30 yr fixed loans these days for non owner occupied multi-families for borrowers with a W-2...and with the no doc lenders it sounds like you don't have to cut thru 8 miles of red tape and offer your first born to get a loan. I'm ALMOST willing to pay the extra point or two just to avoid the annoying traditional bankers I've had to deal with lately. Let us know how it works out and what rate you end up with

@Brian Garrett Without knowing property specifics, I can't say for certain what you'd qualify for. The two properties I just closed for another client were no tax returns, no income verification, 80% LTV, at 7%.

I would like to leverage my cash but I don't have any private lenders. How do I find these?