All Forum Posts by: Account Closed

Be careful here. If you are paying cash and refinancing there is no underlying mortgage to pay off. This becomes an unseasoned cash out refi on an investor property and I guarantee you that these banks will have an issue with it. We run into this all the time. Typically what you will find is that they will allow cash out only to 65-75% of your purchase price which leaves a significant portion of your cash and improvements tied up.

Better NOT to buy with cash but always make sure there is a note/deed of trust or mortgage filed at closing on the purchase so you are alwys paying off underlying debt. Unseasoned rate and term (no cash out) is much easier.

Yuck. That's a tough one especially if he has 10 mortgages or more on his credit report. World/Wachovia will do it but not at 90% - 70%. I also know of a bank that does "fractured condo" loans. You may want to do those 5 condos as a blanket commercial deal because you will run into warrantability issues on the residential side. Good luck!

Definitely go for the building. Especially if your exit strategy is to sell. Yor condos could end up being unwarrantable (ie you own more than 10% of the units or more than 50% of the units are NOO) and your buyers will have trouble getting financing.

I vote for GRUMPY!

The value play can work if you have some experience and cash. The most successful one I have been involved with is a client that purchased a 156 unit apt bldg. They were able to reconfigure 30 2 bed units to 3 bed units without having to add any square footage. They increased rents $150 per unit thereby increasing the value of the bldg substantially.

Know your market, know the market rents and be aware of the absorption rates in your area or target area.

If it is NNN and you want 100%, you need a single, publicly traded, credit rated tenant. The deals are sized based on the length of the lease and the financial strength of the tenant.

There are lots of resources for learning about becoming a private lender. George Antone at Wealth Classes has a three day private lending mastery class that is pretty comprehensive. He discusses strategies that involve lending your own money as well as other people's money and making money in the spread or through arbitrage.

I broker private money between private lenders and borrowers and I also run a private equity mortgage pool. My best advice is to work with an experienced broker or fund manager and be VERY clear on your rules for lending or "guidelines". There are a lot of bad deals out there and you have to know how to separate the bad from the good in order to be sucessful.