All Forum Posts by: Riaz Gillani

The catch is the rate/terms and that your chances of closing are 50/50 until the moment you close. Local lenders, as those mentioned above, have a higher risk tolerance and can stomach a bit more than a national lender. But there is a limit to the risk they're willing to endure. Anything out of the ordinary in doc collection/underwriting can push the file over the threshold and kill it entirely. 

In the private lending (DSCR) space, levels of recourse are dependent on the lender, not the state. So it's more important that you ask your lender if their loans are recourse / require a PG.

It's also worth noting that your personal credit may still take a hit if you default on a non-recourse loan. Especially if that loan reports to credit bureaus. The lender just has no legal course to pursue your personal assets in order to ensure full repayment. 

Re: question #3, mortgages typically cannot become recourse after being recorded. An exception is partial recourse loans where the loan becomes recourse if one of the listed events happens to have transpired (bad boy carve-outs). And again the level of recourse is based on the lender (see above). So yes, loans in the states you're thinking of can be recourse if there is a PG. 

Hello, looking for 1 ticket and 2 tickets if available!

Yes this could be seller / owner financing. It's just most typical for property owners that own their asset free & clear. But can also be used if the lender permits it. 

A caution though would be that you ensure you have a reputable claim / interest in the property. Not just go off a verbal agreement or napkin contract that has you paying the mortgage for a seller who can leave you in the dust if he wishes ...

I don't do it unless I have to in order to cash flow. And it's not because I think rates will go down in the near future. Just a little bit too much global uncertainty for my liking to lock up additional liquidity. Risk of recession in Europe and here at home, inflation, war in Ukraine, market conditions + Covid regulations in China ... mid-term elections on the horizon. But I'm also a stickler for time value of money. Admittedly to a fault.

For most I think the 'sweet' spot is buying down a quarter or whatever number of bps that can be recouped within or shortly after 5 years. Those people being risk-averse, casual RE people that would have otherwise had the money in a low yield savings account. 

Congrats on what sounds to be the makings of a successful BRRRR.

When did you buy the property? Asking to make sure you’re at least 3mo seasoned. It’s unlikely for a lender to lever against As-Is inside of 3mo (often times 6mo). 

You should have no problem getting a loan for $75k. There may be some rougher waters ahead if you’re loan amount is $50k to $74.99k. Namely marginally higher rates. But fear not - BP will help you with that last R.

Some of the answers above seem to be a little coy ... so in most circumstances - NO. Certainly not conventional loans. Some government issued loans may be. And the current owner of record could read his loan docs or ask their lender to be 100% sure. But conventional or private lenders don't allow payments to transfer from person to another with the exception of some unique circumstances (Death, Divorce, transferring to a family member or when a Living Trust is at large). It doesn't really benefit them (unless the current borrower is at risk of being default).

They instead have a "Due-On-Sale" clause. If title transfers - via purchase, transfer deed or whatever other mode - the mortgage is required to be paid in full. 

Can you fit a wall-mounted bar top / floating console in the kitchen? We recently installed a solid walnut one with a live edge. Can give your CO springs rental an even greater rustic, warm feel.

Agreed on your delineation of active and passive.

To add, I'm an advocate for the idea that "IF you're thinking about work, you're working..." 

So I'd make the case that passive investing needs to be devoid of contemplation or deliberation of how said investment is faring or whether or not it's being tended to. My RE investments aren't passive. That being b/c much like you said, I haven't built the necessary structures or channels yet. 

My shares in an ETF - that's a passive investment.

If the commercial property you're referencing is true commercial (retail, office, industrial etc) definitely not. The asset classes are too different for a lender to cross collateralize and have a reliable takeout. A balance sheet lender theoretically could but then you're looking at a pretty short term loan with high interest rates. 

If the commercial property you're referencing is investment-residential (SFR, 2-4) it's not as certain that you cannot - but it is unlikely. Reason being it's not often you can get a cross-collateralized loan on two properties. 3+ min, 5+ the norm. Add to the mix the mobile home element - which lenders already have an aversion towards.

Still, though, the 'balance sheet' lender can do it. They make the rules when it comes to their fund and don't answer to secondary market requirements. But explore other options for raising your capital if you can.

Out of curiosity, why are you keen on a single loan? Do the properties not Debt Service individually?