All Forum Posts by: Joel Soforenko

Kyle,

It is my opinion that this is an issue between you and the General Contractor, and not you and the Loan Officer/Bank.

Frankly,  most banks and lenders would not do more then issue you a Term Sheet without knowing whether you are going to have the cash required for the cash injection qualification.

At this point, you are telling us that you are not certain where you are going to find the required cash needed to complete the underwriting qualifications.  

If you like the terms (and this is a whole other issue) then stick with the bank and find yourself another General Contractor.

Frankly, you are going to have this issue with any lender until you solve your cash issue and are able to show evidence to the lender that you are ready to move forward.

My main concern is who controls the cash coming into the cash register.  Cash businesses are notorious for partners having sticky fingers.  You will never know if the numbers reported are the true income and expenses of the business.

If you go in with your eyes wide open and you are ready to take that risk, then you have to decide if the return on investment as described makes the "risk" of your investment dollars worth it.

Jonathan,

1.   Since you own 30% of the corporation, you would be a co-borrower for the corporation
     purchasing the property from you.
2.   When you say "They would like to develop the piece of property", the word "They" also
     includes you (as you own 30% of the corporation)
3.   This should be acceptable to a Lender as long as all transactions are done on a "Fair Market               Value" basis.  Understand that any stockholder of the corporation who  owns more then 20%              of the stock will have to be a co-borrower.
4.   I am not an expert on 1031 exchanges and do not have an opinion on how the 1031 exchange           would affect the stockholders of the corporation.  

Bart,  If the Tenant wants to purchase the property, an SBA Loan will allow him up to 90% of the purchase price.  If you and your partner wanted to hold 10%, the Tenant may be able to purchase with 5% down payment.

I would be happy to speak with you and the tenant if this is an option which will work for you.

Adam,  I come from the lending side.  I would be happy to evaluate this opportunity with you.  Three years of Income & Expense Statements (or tax returns) would give you a good idea of value from a lenders point of view.  We would calculate the maximum loan amount available and from there deduce current fair market value.

Jason,

I haven't spoken to a rep from Recasa in a while. The reason being that (the last time I checked) they required the borrower to either1) put a second mortgage on his/her residential home, or 2) put 20% of the loan amount in escrow until the loan is paid off.

The reason I haven't spoken to them in a while is that my clients would not do one of the above.

Check this out and let us know.

Thanks Joel,

Just another old dog learning new tricks.

Dev,

You do know that you cannot use FHA loans for investment properties?

That being said, the 3.5% is of the purchase price.

Mallory,

Not sure what a real estate VA is. That being said here are some questions to help the people who may be able to help you (including me):

1. What country does the investor live in now?
2. Does this investor own real estate in the USA now?
if so, what kind and how many?
3. Did this investor pay for the US real estate with cash?
4. Is this investor looking for short term or long term financing?
5. What type of properties is the investor looking to purchase now
(SFR, 4 Unit, 20 Unit)
6. Do these potential purchases need rehab (turnkey usually means
no rehab is required)
7. What kind of LTV or LTC is this investor looking for?
8. When you say the properties are always $50k - $100k, what exactly
does this mean?
9. Are these turn key properties rented before being purchased?

Once we have a better understanding of what you are looking for, I'm sure you will have some people with leads for you.

John,

What is the reason you want to go stated income?