All Forum Posts by: Patrick Roberts

BRRRR to create the equity needed to cover the LTV gap, househack with a new primary, or save up the downpayment needed. Or partner/JV with someone who can bring the needed downpayment.

This would be a consumer finance loan. I'm not familiar with CO's laws, but almost every state in the country does not allow unlicensed persons/entities to originate consumer finance loans without a license unless they are the owner of the property being sold and the loan is purchase money financing. Also, owner-occupied properties have to comply with the ATR rule in Dodd-Frank, meaning the lender would need to evaluate and document your income, credit, and DTI. Asset-based lending does not work with owner-occupied properties (primary residences) for this reason, meaning you cannot lend based solely on the value of the property. ATR has to be considered.

This plan is unlikely to work unless the target property was purely an investment property.

A handful of DSCR products will allow a seller carryback second lien, but I dont know of any DSCR anywhere that will allow more than 90% CLTV. If you're attempting to finance 100% of the costs, this is very unlikely to happen. Especially in FL right now.

It's not just new construction - a lot of lenders wont do DSCR loans on rural properties, either. Make sure you can find permanent/take-out financing before beginning work, because even if you find a construction loan, you may not be able to refi out of it.

 This. Every time I hear someone wanting "private" lending for their project because it will be "easy money" for the lender, it's a project that no institutional lender will touch and the borrower thinks that 5% is an excellent rate for the lender. Same goes for when borrowers complain about "complex processes" or lenders "wanting too many documents." This aint Push Button, Get Mortgage. 

 Have you had a lender run the calculation on the COE yet? The math isnt quite as straightforward as it sounds. 

If you have been told by a lender that you need to pay off the existing VA loan, then you're probably not going to be able to refi the existing loan without putting some cash into it to push down the LTV. Also, there are some pretty tight rules around experience and reserves requirements when it comes to VA multifamily purchases. Just FYI.

Whether or not you can use another VA loan will depend on the remaining entitlement on your COE, as well as a few other aspects. Will the new property be a primary or an investment property?

Lawyer time. Is there not an operating agreement in place already? If not, good chance that youre effed. Was there a promissory note and mortgage/deed of trust or security agreement from the closing that indicates that your contribution was a loan secured by a lien a not a contribution of capital? How are your funds documented on the settlement statement? So many variables here. 

You need to talk to an attorney asap. Id take action now to retain all emails, texts, phone call records, document all conversations, etc.

I agree, the AI generated comments and posts are out of control

 Death by a thousand cuts, one mortgage payment at a time.