All Forum Posts by: Steven Lee

Alpesh,

No bank or lender is going to give you a Home Equity Line of Credit If your property is under a LLC. your ratios is too risky at this present time. Generally if your property was under your personal name, most financial institutions would go up to 80% Combined Loan to Value (CLTV), but because of COVID 19. Majority of banks, credit unions, and hard money lenders are cutting back. I hope this helps you have a better understanding.

Alpesh,

Unfortunately, your Loan to Value (LTV) is at 70%. No Bank or Lender will honor a Home Equity Line of Credit (HELOC) on a rental property. Even in a best case scenario you would have seasoning issues. You would have to quit claim deed your property from your LLC to your personal name and wait 6 to 12 months, If it was even possible. I've been in the lending Industry for 20 years, and I feel many people on BiggerPockets give misleading information a lot of times. I hope this helps you. Good Luck!

Jerry, 

Ideally, you would have your contractor come out with you before you make an offer. You could use your contractors' bid as a leverage point for your offer. Many HMl will require a scope of work (bid) in order to process the loan.

For HML/ PML the PP may be too low. Your best bet is either asking your friends/family for a loan, tapping into your 401k, or structure the deal as seller finance.

The minimum amount would be 75k. Property has to be under 80% of ARV.

Anna, What LTV were you hoping to get?

Alex, will you be purchasing this under an LLC, or under your personal name?

Are you looking to do ground-up construction? 

Helen, from my point of view it seems like your lender is trying to pull a fast one on you. There are many lenders that will fund 100% of the rehab with up to 90% of the purchase price without JV. 12% is not reasonable and 4 points are definitely not industry standard. Red flags left and right.

Have you considered a Non-qualified mortgage?