All Forum Posts by: Jonathan Taylor

@Ave Escobar 

So I understand correctly, you are the owner of the Duplex or looking to buy one that is more than 90 days late?

If its the former, and you own the property, speak with a HML to get out of this note. This is a tool to buy you TIME. If you do not have an exit strategy and a HML just digs you deeper in, then discuss with the lender for a solution.

@Ave Escobar What @Chris Seveney stated is correct as I am in the same process on a deal I intend to buy. The first position lien holder has to wait 120 days past due until they start the foreclosure proceedings. They can file an NOD anytime within that 120 day period. This lender filed on the first day they could. I spoke to the first lien holder in person who informed me of this process.

But the short answer is, in CA foreclosures do take time so the best option is a short sale with the current owner or an agreement with the lien holder to take if off their books. 

@Quillan Houser great deal but I see the issue off the bat. Most HML/FNF lenders have minimum loan amount/ home values and this property is 45k, My lowest lender is a 55k. I would search out local HML lenders who know the market. If the property is located as RURAL, that will also exclude a good deal of lenders but local guys, albeit higher rates, would be able to help in this regard.

@Scott Davis I can only speak on the lending portion of your deal but STR specific loans for purchases can be done as long as the location has plenty of AirDNA for STR comps similar to this property. We can close a STR loan up to 80% LTV (assuming the market ST rents debt cover) and my lenders prefer LLC vesting. I have been getting a lot of traction with these loans because you can garner higher monthly rents than Long term which allow higher leverages.

@Michael Dallas there are pros and cons to each loan option but a DSCR is one of the main lending products used by landlords. With your positive attitude Im sure finding a capital partner wont be a challenge.

@Michael Dallas to add clarity as to why rent by room strategies make it very hard for financing is most business purpose loans are sold on the secondary mortgage market and the end buyers do not buy rent-by-room on boarding home style operations on residential properties. If there isn't a buyer for this loan, lenders will not offer them as products for investors. Its not about whether the lender is lazy or not.

For your scenario, you can qualify for a DSCR loan based on the new property's income but down payment of at least 20% will be required for a straight forward DSCR loan.

@Heather Brookey the issue would be health and safety and what kind of liability you, the owners, would be taking on if you left the issues unrepaired. Can you elaborate on what the specifics of the structural issues are? 

@Ty Brady happy to take a look at your deal as we are the highest rated lender on bigger pockets. Are there any questions you have that I can answer for you?

@Arijit De can you provide more details on the deal (purchase price, rents received, etc)?

Your main issue isnt unit count but title seasoning. For 5-20 unit financing (of which there are plenty of 30 yr fixed options available), title seasoning varies by lender but the shortest I have is 6 months, With most lender 9-12 months. You wouldn't be able to find long term debt if you have owned the property for less than 6 months. 

So to not dive in too deep before we have all the info, how much do you owe, what is the property worth and how much are you collecting in monthly rents?

@Andy Chen A close ended second is just a second position loan that does not have a revolving line of credit. Its like your first note mortgage and sometimes can have a shorter amortization period but will have a higher rate than your first position mortgage. The short hand is 'second mortgage'