All Forum Posts by: Sefa Demirtas

@Kevin Romines

The fact that Fannie and Freddie had that limit is new to me, makes a lot of sense now, thanks. I guess the 20% down loan I found pre-covid was a portfolio loan, so they had more flexibility.

I need some parameters to narrow down my search. Do you think credit unions or banks are more likely to have portfolio loans? (Not sure what Non-QM loans are or who would offer those)

@Aaron Montague

Thank you for the list. I am looking for non-owner occupied multifamily properties, so unfortunately none of these options give me what I want.

Does anyone actually know lenders/banks giving 20% down option? I called a few and they were all 25 down.

Hi all,

I am looking for investment properties in Greater Boston area. Before the pandemic hit, I was able to find lenders that would offer 20% down for investment properties. Today, I can only find 25% down options. That reduces my purchasing power to the extent that I am almost priced out of neighborhoods I want.

Are 20% down loans for investment properties nonexistent now? Does anyone still offer those? What about interest only loans?

Thanks.

Thank you everyone for the responses. All very nice points. I did speak with even more attorneys and seems like buying on your name and transferring to LLC is a common practice among many other small cap investors like myself. As some of you mentioned, being upfront with the bank about the intention to transfer down the road seems like a good idea to me, and unless they tell me explicitly not to do it, I will follow the "beaten" paths.

I spoke with two different lawyers that do residential real estate seller/buyer representation. They both said that it is common practice that people buy investment properties on their own names, and after a few weeks of the closing, they transfer the title to a single owner LLC. When I ask whether the credit union would call the loan because of the "due at sale" close, they both said "don't worry about the loan being called". But they also said "no we don't notify the credit union or bank about the title transfer to an LLC", which seemed like shady business to me. When I pressed them on what is the downside to ask the bank's blessing for the LLC transfer, they gave evasive answers and repeated that "they wouldn't look back on a closed clean title".

Closing as an LLC in the first place would require higher rates and down payment, and of course I want to pay residential rates and lower down payment. How do you recommend that I move?

 Thanks, I thought this question would have an obvious answer and would have occurred to many folks here, so I wanted to try this forum first. You are right it does make sense to talk to a lawyer too, not just lenders...

Yes it still would cashflow, but closing as an LLC means also higher downpayments, which ties up more cash than I would have liked. This is why the other path (sign on my name, then transfer) still looks more attractive. One of the lenders above said he doesn't think the bank would call the loan just based on this, but you are right, I am exposing myself to that risk.

Thanks for the response. I think the CPA recommended LLC only for liability protection. And yes, I do want to have it under LLC eventually, my question is about "how" to get that done. As far as I understand, to reduce complications of title transfers etc, you can form the LLC before closing and close with that if you are willing to pay the higher interest rate (even though one lender said the LLC wouldn't have enough performance history so they wouldn't close it that way??). The other option is to close as "myself" at the lower rate and then transfer to LLC soon after closing. While this is attractive interest rate-wise, one lender said it may not be allowed or it may trigger a loan call in. Or they may increase the rate, which defeats the purpose.

@Kulin Dakwala thank you!

@Kulin Dakwala thank you, that’s comforting. You are talking about your attorney that represented you during the closing, right? Did you confirm that the lender would have been OK with this arrangement before closing?