All Forum Posts by: Lisa Rispoli

@Ash Patel this is solid advice. Fantastic point! Thank you! I asked my investor and broker if they could refer me to their distressed deals or contacts who can help me find local deals and they didn't have much to say about it. I'm sure local banks would help me find properties after we build a relationship! Thank you for pointing this out to me, Ash!

It's fico module 9 for future inquiries. 

Got it. I'm just filling a hole my lender couldn't access because of an issue with experian. He said he uses the built in the software from FNMA/Freddie Mac, but doesn't know what module it is. Thanks though @Chris Mason

What FICO Module does your lender use? 

Please find us on FB. If you have issues please let me know. I can't post the link because biggerpockets will delete the comment. 

Thanks @Jaysen Medhurst. I understand what you're saying. 

We're in a transition period because my husband is in residency. We're not at the 50% mark, but will be in 2 years. We want to start now instead of waiting for his attending salary. But yes, I completely hear your concern and appreciate your input. We can put down 25%-30%. I'm going to talk to local banks too. 

What do you think are potential pros and cons of working with a private lender or a small bank? Are there overlooked pitfalls I should be thinking about? I don't have the complete terms of each option, but before I officially apply, I want to make sure I'm asking all the right questions and thinking about each component part. 

Yikes. By no means am I bragging about our astronomical student loans @Account Closed.  Staring down the barrel of over a half a million dollar debt is nothing of which to be proud. I'm just asking the hive mind how we should handle the situation considering our circumstances and discussing the pros and cons of option 1 versus option 2 (e.g. easily overlooked pitfalls from either side of the token). I'm a positive and helpful person, and Bigger Pockets fosters the same mentality, sir. 

@ryan 

@Ryan Johnston and @Greg Fox were you able to find it on FB? "Northwest Indiana Real Estate Investors"

I'm a lawyer and my husband is a doctor. We have astronomical student loan debt from a top law and medical school. We have been searching for a hard money lender or a bank who warehouses their own loans because we don't qualify as conventional buyers for a multifamily. Our debt to income ratio wouldn't be touched by any bank that sells off mortgages in the secondary market. My credit score is well over 800 and I'm fairly liquid (easily can put down 25-30% on a multifamily).

We need to borrow from a hard money investor OR a small bank.

Option 1: Hard money investor

My mom has been in real estate for years, and she referred me to her old friend, who referred me to a commercial loan officer (my mom also knows) who has a private investor who will work with us. His interest rates are reasonable at 5-6% *likely 5.2%*, and he may also be able to qualify us for a 25 year fixed rate loan between 7-8%. We haven't gotten all the details on the exact product he'll put together for us. I'll find out tomorrow after the loan officer pulls my credit. I know that this lender can lend the hard money in 4-6 weeks. The investor sometimes does have a prepayment penalty of either 5,4,3,2,1 or 3,2,1. We can refinance after 6 months. He will consider ARV.

Here's the concern: The loan officer charges a flat fee of $3500. He requires a $500-1000 retainer (likely $500 because of his history with my mom) that I don't play on paying him until I put in an offer. It's 80% refundable, so if the deal falls through, I pay $100-200. This is an old friend of my mom's. He's been in the business for 20 years. I'm just wondering if this is outlandish or on par with the industry standard. His debt to service coverage ratio is 1.25%.

This first purchase is smaller than the investors usual investment, but he knows the potential of future business when my husband and I quadruple our income in 2019. The investor is very interested in us, and generally enjoys our character and business skills.

Option 2: Bank that warehouses their own loans.

I'm working with another loan officer who works with banks and doesn't charge a specific fee. (I think he gets about $300 per transaction). However, the banks terms will not be as favorable as the private lender. We don't have any specific bank in mind, but I meet with him later this month to go over our options.

FYI we're purchasing in NW Indiana and we do not have a specific property lined up at the moment. Inventory is tight and we're working on finding one fervently.

@Andrew Postell thank you! I'll post that there now. I appreciate the tip.