All Forum Posts by: Joshua Fulenwider

You can offer a higher interest rate but on an interest-only note (or offering the same rate but interest only for the first 3-5 years).  Then plan on refinancing out of it as soon as you can to obtain a lower rate and start building equity.  It at least gets you in the door and you can start to establish yourself.

There are probably some other ways to make it work.  Good luck!

If it is good quality construction, I have heard of some work being permitted after the fact.  If it looks like junk it probably needs to be torn out.  Look for signs of settling (cracks in interior and exterior walls, sagging roof, sagging floor, bowed walls, etc)  to start getting a feel for the quality of construction.  Make your deal contingent upon it an inspection and then get a professional or someone from the city building department to take a look (even if it is a wholesale).

Another good indicator would be if it has financing on it from a known lender (any bank).  Something terrible would be noticed by an appraiser and probably commented on in the appraisal which would likely kill the deal for a bank.

Also, I'm in Greeley.  Let me know if I can help or if you are looking for an end buyer I'd like to take a look.

RV parking comes to mind.  Not sure how big it is where you are but here there is a shortage of space.  Not an actual camp ground but just a storage yard.  Not sure if the lot is big enough for that.

You mentioned the creek on the back of the property.  Since this is offered at seller financing you should check the flood zone yourself.  If it is in the 100 year flood plain you should get flood insurance on any structure you wish to keep  or for any storage purposes (a bank would require flood insurance).  This can be pretty expensive.  So check out pricing.

Check with you local planning and zoning department.  Remodel of space should be permitted and conform to any local regulations.  Your local Building & Code enforcement department can probably point you in the right direction.

I would want to see that you can service the debt without relying on the property you are purchasing.  If you need the cash flow from the property to pay the signature loan then I would not approve the bank loan.

I hope this post is still relevant. 

My experience is that investors and lenders will eventually find you as you build experience.  For your first one a friend or family may be your best bet (but be careful when mixing money with relationships).  I have run across a few "lists" of people looking to loan money.  Typically they have been bogus or the people on the lists are very frustrated with their information being distributed.  

Best way is to keep networking.  Your hard money lender today may have an investor looking to place some longer-term money.

If I understand correctly you had a blanket loan covering all 3 properties.  

Refer to your original Loan Agreement (not the Promissory Note nor Mortgage/DOT) . Your Loan Agreement should spell out what the release provisions are. If the Loan Agreement doesn't say or you don;t have a Loan Agreement then you should play very nicely with the banker and try to convince them to see things your way. They will want to ensure that the remaining properties have the capacity to cash flow and service the remaining debt. If there are no release provisions then my experience has been that the bank had the right to collect all of the proceeds from the sale of collateral securing a note to them.

On a related note. see if they will re-amortize the loan to lower your payments with the new lower loan amount.

I have some old excel spreadsheets I used to use as a commercial lender if that would help?  Send me a DM if you are interested.

That's a pretty advanced question.  However, I will let you know that there is a lot of speculation that LIBOR will be going away and the most bank's will have the ability to pick a comparable index of their own choosing.

It sounds like either bank is planning on giving you a 5/1 or possibly balloon it in 5 years.  Are you planning on holding the asset for more than 5 years?  If not, then just pick the lower rate.  Also, if you are planning on refinancing within 5 years the potential adjustment doesn't matter much.

Most indications are that rates are going to continue to rise, so with either one you are looking at a potential rise in payments.  To combat this with either index you can ask the bank if they have adjustment caps.  My experience is for caps to be 2%.  However, if one of the banks has a lower cap than the other, this will help protect you from large adjustments.

Not sure if I ever really answered your question but here is a whole bunch more information for you to consider.

I hate to tell you this but there a lot of red flags for a lender in your situation.  Traditional lenders don't like when people recently have switched jobs unless its in the same field.  It is also hard for a lender to quantify the value of "room and board" and as banks have to justify their loans to the government I think you may have a hard time to stick their neck out for you unless your room and board is somehow listed on your paycheck.  Talk to a local lender about your situation.  They may walk you through some options before you fill out an application and they pull your credit.  Also, since you have no investment history a lender is most likely not going to give you any credit for the potential income of your planned investment.

You may be able to get a private lender or perhaps a bank that does some portfolio lending to give you a chance.  

Keep looking and asking questions.  Just because one bank says no, doesn't mean another won't say yes.  Community banks are more likely to have flexibility in their underwriting than national banks.  That has been my experience anyway.