All Forum Posts by: Patrick Roberts

Wild. I just added this to my long list of reasons why I dont do business in California. 

I would expect that there will be class action lawsuits and appeals that will block enforcement of this for as long as possible. Interesting to watch it play out, nonetheless. 

Wouldnt surprise me if banks start using whatever provisions they have available to cancel/convert existing helocs asap to recover as much as they can. 

Depends on the situation, borrower, and purpose. 

 I suspect the SC wholesaling law will be revised and materially changed before this is over with. Parts of it are vague, and I personally feel that some of it overreaches the state's authority to regulate. I guess we'll see, though. I know of a few people still doing it illegally. 

That being said, I also dont think taking title is that big of deal, either. It's mostly the wholesalers who have no cash and no ability to get financing that are complaining. 

I close loans in coastal SC all the time and look at CL100's regularly. A moisture content of 20%+ on exposed subfloor in the crawlspace requires remediation prior to closing as it is excessive and damaging. 20%+ inside the property in the conditioned space is a serious problem.

Relative humidity is also high in that reading (over 55%). 

 Lol right? 

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.