All Forum Posts by: Matty Foley

There's a lot involved in this, don't take the decision lightly. Is this a significant amount of money? Will they be using the funds for an investment opportunity, as a down payment for a primary residence, or are they just in a financial jam and need the cash? You'll want to underwrite the loan. I was going to make a post about how to underwrite loans soon. I'll hopefully get to it on Wednesday so that may help you. Through your underwriting, you'll want to understand how they will pay you back. What's the primary source of repayment; if the primary source fails, do they have a secondary source of repayment? Depending on the use of the funds, the last resort will call for them to sell an asset to repay you. You should take collateral of some sort that would be assigned to you if they don't pay you back. You'll want the personal guarantee from the borrower, and all of this needs to be described and executed by the borrower in a binding document. You will be taking on risk so you need to make make an educated decision on the likelihood they can pay you back. If your underwriting shows they probably can't repay you, you'll need to deny them. You shouldn't worry about charging them a high-interest rate, you are pricing this based on risk. If they don't qualify for a bank loan, it means there is likely a lot of risk you are taking on. I don't know the details so I can't say all you would want in place, but that's a brief description. If it's a family member or friend it complicates things even more and can ruin relationships. I'd start with a google search on how private lenders and hard money lenders make credit decisions. There should be plenty of information out there.

@Lauren Hogan when are you scrolling through the trending forum topics on the mobile app, it only shows the person name. Once you open up the thread, it includes their name, Ann location + job title if they have provided that information. I think it would be helpful if that information was a shown on the home page of the forum discussions. Thy way, as you are scrolling through them you can see if the person is in your market or lives in your state. I am only familiar with the Maryland, DC, and Northern VA markets, so I'll open a forum thread and then realize the original poster is asking a question about California and of course I can be know value. It would just allow users to narrow down the threads that are more relevant to us based on location.

@Ozzy Llanes Unfortunately that’s too far out of market for me. Good luck!

@Ola Dantis I agree because the expense of living is higher than ever for people in the late 20’s to mid 30’s. With mortgages, student debt, the cost of daycare if you have kids...looking at financials for a living, the cash position of both young and older prospects/clients concerns me more than anything regarding the economy. There just doesn’t seem to be a lot of people who are sitting on a significant of cash(outside of very wealthy individuals with multimillion dollar net worth’s). Needless to say, 2 of my most successful and brightest clients are under the age of 35. Hard working and meticulous guys that are absolutely crushing it like you wouldn’t believe. I’m in my young 30’s and do very well myself as a commercial lender :-). Point being, don’t sleep on the younger generation; many of us our grinders and do extremely well. Interesting topic nonetheless.

@Lee Mast I see many conflicting responses, but here is your answer: Yes it is possible to get 80% LTV but there are many factors to consider. All of the Community Banks I know (and I've worked for a few) set internal LTV limits at 75% for investment properties (Triplex or not). 80% would be a policy exception, which Banks try to avoid as much possible; mostly because loans with policy exceptions will be looked at with more scrutiny by the examiners. Higher LTV also = higher risk. With that said, I've certainly done my share at 80%. *In my personal experience, it always helps if you can give something in return to help justify the higher LTV. That may be bringing over you entire deposit relationship to the bank (community banks lifeblood is deposits to find loans), or taking less favorable terms elsewhere, such as a shorter amortization, higher interest rate, or higher origination fee. Another consideration is; if you are a very strong borrower, its likely the Bank may have no issue with 80% LTV because they will want you as a customer. To summarize, it is possible but you may have to shop around a bit - and Loan terms can always be negotiated, so be willing to give a little in order to get something in return.

@Drew Moyer Hey Drew, I'm a bit confused. If you are going to rent your current residence, will the Condo in Virginia be your new primary residence? Or will the VA Condo also be a rental? If it will be a rental, I can tell you the typical terms and what a community Bank will look for when underwriting the deal for approval. Let me know! Thanks.

@Joseph Bernal Hi Joseph, this is not uncommon. There’s a few options on how the Bank could do this; but a Loan for an acquisition + improvements is not an issue at all. The most important items are the cash flow of the subject property (net income should cover the debt service), your global cash flow, and your personal financial strength. Anyways, Where is the property located? If it’s outside of my market I’m still happy to go over what your options are. Let’s connect and shoot me a private message with the some info and I’ll get back to you with answers. Thanks.

@Ozzy Llanes Hey Ozzy. We could certainly do a blanket mortgage for all of the properties. Where are they located. My lending territory is only MD, DC, and VA...

@Anthony Triano Take a look at Dearbought in Walkersville. Lake Liganore would be another. A lot of Lake Liganore feeds into Oakdale high school which is a great school. Urbana is of course an awesome place to live, but the prices of homes are becoming like Montgomery County prices.

@Brandon Wolf Hey Brandon, I’m also new but nice to meet you. One of my closest friends owns a realty company and he only works with investors. Nearly all of his clients invest in 1 to 5 unit properties throughout Maryland, so I will certainly ask him if he has anyone to connect you with. I’m a commercial lender and my specialty is residential and multi-unit investment properties (it wasn’t my intention, but it’s become my niche). I recently financed a very nice 4 unit apartment building in Baltimore, and do these very transactions often throughout Maryland. Do not hesitate to ask me any questions you might have regarding traditional financing. I’m happy to discuss the typical loan structure and terms, and go over how we underwrite these types of deals. Just let me know! Good luck.