All Forum Posts by: Vijaianand Thirunageswaram

Hello all, I want to be little more clear about my need. I already own 5 rentals and 2 owner finance properties. My DTI is already close to getting to saturated and only has room to buy one rental at a time. I don't want anymore debt to be stacked on my credit report. I also have my wife being MLO has acccess to conventional funding. No worries.

I need portfolio lender or private lender who is interested to give long term with decent rate so we can use to owner finance it. NO credit bureau reporting. 

Hello

We just closed 2 owner financing deals last month and want to do more.. I am looking for lender who can finance my owner finance deals for 6-7% long term. 

Vijai

@Omar Cantu  I hear you loud and clear. I know it's not easy to get started than all the gurus and books preach. It can only happen with your Persistence and Perseverance. I am assuming you got them both and you want to make the move. 

If you had gone thru the Podcast and BP books, you should have some idea what should you do.  Let me quickly give you some tips,

1. Set your long and short term goals.

You already chose to get your rental with House hack. It's not easy to do and very scare. Try to have another plan of action if it didn't work out in certain time limit. 

2 Start contacting other experience investor if possible in your area to help out.

3. Start creating your team like Realtor, Loan Officer, Inspector etc., 

4. Try to find properties and do your numbers and start making offers after looking at the property. 

5. Make the contract work and close on the property. 

If you are on top of it, you should be able to close a property within 2-3 months easily. It's all up to you., You need to hard press and keep moving.. don't give up.

If you need help, don't hesitate to ping me. 

Vijai

I have one property under Portfolio lender which I forgot with Visiolending. They are good but charges quite a lot. I have contacted them again to see they are willing to lend for me. 

You said you have 20 prop to refi. Did you have any conventional at all?

@Khanh Tran That's absolutely right!! Yes as I mentioned there is risk of getting called by the lender which has never happened to any investors. Because banks and lenders are in the business of lending and as long they are getting monthly payment, they don't like to call the note and go to foreclosure and waste their time and money. I hear the same thing from other investors. Investments are always risky and this one is little more but it's worth it. :-)

@Felipe Carrillo I heard about this movement to stop anything obstruct the owner/seller financing deals. It's been going on for a while. I don't they will do it. 

@Chris Hopper I refinanced conventional. Right now I have 5 rentals on conventional plus my homestead property plus this one. The deal with DTI is as long the rentals are wash, it won't affect your DTI. Currently all my rentals are wash. So my homestead property, this owner finance mortgage will show up as debt. I might be able to buy another rental prop if I don't lock up with another owner finance. My goal is to get two more rentals this year and do more owner finance if I find a lender who can do 6-7% fixed.

@Michael Ealy That's too many wraps to go around which will really complicate things unless the seller owns straight and clear.  It's not easy available in the market either. If you need to scale, you need to replicate it fast with good formula. I have the good formula but just need the right source to fund it.

sure @Tony Castronovo. Always open to connect and learn more.. Learning never ends!!

How you doing folks?  

Jan is already gone and only 11 months more on this year... Wow, time is flying fast...

Anyway, I was just excited to share that last month, last day  we closed two owner financing deals back to back. It was our first time doing it but all went per plan and closed as plan. Actually one of them we closed week early because we were able to get the paper work done quick and every thing worked out as expected and buyer wants to close early so we got it done.

How I end up starting out? 

I been wanting to do owner financing ever since I attended REI meeting last year. Guy who talked about owner financing really peaked my interest and I talked to my wife and she also liked the idea. So we were looking for a way to start it out. At that same time last year we bought our 5th property for flip but didn't able to sell due to market slow down and bad contractor job. We were trying for rental as our back up plan. Rent also didn't go quickly as expected due to slow Holiday months. That's when we thought why can't we try out owner financing. We quickly refinanced our Private loan to high 6.25% interest loan and listed for owner financing in Jan 2019. It went under contract immediately the same week and we closed end of the month.

What are the NUMBERS?

1st Lien - $125,500 - 6.25% - Montly payment - $771.90

Sale Price - $175,000 - $1000 contribution = $174,000

Down payment - 10%

2nd Lien (our finance) - $157, 500  - 

Interest rate - $9.95 , 8/1/1 ARM - 20 year Amortization

Monthly  Payment - $1425.66, Escrow paid by Borrower

Cashflow: $653 (before tax) - 

That's damn good cash flow. We are out of the property and as well made ourselves good check every month. 

Con: As usual risk factor on the 1st lien being called by the lender. We talked to many investors who are doing it and everyone said the same thing, don't worry it will never happen. We also hope so as well.  

Secondly if they don't pay after a year or so, we can foreclose and get the property back and put it back in the market. We got 10% down payment to support if funds are needed. We hope they won't because 10% almost $20k after all their closing cost is paid by them. That's lot of money for these folks. 

On our 2nd one, we bought that property to keep it as rental because my wife loved the area. But I kept telling her numbers didn't work due the HOA and High taxes and want to get rid of it. We put it up for sale and owner financing and got it sold.

Numbers

Cash Purchase: $141,500

Rehab: $1500

Sale Price: $177,000 - Seller Contribution $1500 = $175,500

1st Lien (our Loan) - $159, 300

Interest: 10% - 30 year Amortization

Monthly Payment - 1397.97, Escrow paid by Borrower

Cashflow - $1397.97 (before taxes)

We are totally blown away by this opportunity to expand our cash flow. So we connected with the agents who deal with owner financing buyers and plan to do more.. Only issue, we need non-conventional loan for 6-7% or cash. Our DTI won't help much since we already have 5 rentals and this owner financing mortgage will show up as well. So I am looking for lender who can do 6-7% long term without NO Due clause. Let's see I get lucky...

It's good start for this year and hope to continue this momentum.. 

@Tony Castronovo Good to hear from you sir! yes, I totally remember our conversation from last year. I am glad things are slowly getting back on track. I hope you will stabilize and make it out of it because of persistence...  Thanks for sharing.

@Andrew Shen All the best and hope you close and move forward.

@Weston Desormeaux That's great! You are venturing into building new homes. It's would be great experience. Which bank are you financing the deal?