All Forum Posts by: Tom S.

@Kayla Elliott  Hi Kayla - this was a commercial mortgage loan with a local bank, that held it "in house" after it was issued.  In other words, not resold to the government so the bank had more flexibility on the condition.

I look at the original commitment letter and it states "xxx amount will be advanced at closing for the purchase of an investment property, and the remaining balance of the loan to be placed into an escrow account to be disbursed as improvements are made".

No points, and only one closing, so I don't have to deal with a short term HML that I have to refinance in under a year.

Hope that helps!

@Bianca Rodrigues  I second Ken's advice above, definitely get an appraisal and inspection if you move forward with the deal.

The two existing mortgages make it complicated.  How much do they want you to to pay, to pay off one of the mortgages (or both of their existing mortgages)?  And if it's a high amount, would you be better off just using that as a downpayment and get a standard new investment loan?

Please post more details once you meet, and good luck!

@Timothy Frazier This will be tough as the HML will want a 1st position loan, but so will the other lender providing the rest of the funds. Also for conventional financing, the DP can't be borrowed.

@Collin Luckett Just adding, if you have the ability to fund with your HELOC, it would be far cheaper than PML or Hard money. I recently opened a HELOC and I recall it's at prime for the first year (7.5% currently), and I only paid minimal closing costs.

PML or HML I would expect rates >10%, plus points, possible prepayment penalties etc.

@Carter Mayberry Just commenting on the "free up my DTI" part. I have a few commercial loans that don't report to my personal credit. But when applying for a new conventional loan, it still has to be counted. The commercial loan should go on your personal Sch E of your tax return too, if the property is used as a rental, where the mortgage interest paid will show.

@Cheryl J McGrath Personally I don't see why any RTO buyer would enter into an agreement and put down money if you don't own the house yet. If the R2O buyer gives notice on their current place and your deal falls through at the last minute, those tenants would be scrambling to look for a place to live.

@Michael Klinger  As others posted, SoFi and Discover personal loans are good options and I've used them in the past.  2-3 business days from application to funds in my checking account.  No fees, no pre-pay. Both offered up to $40k, 12-14% rate which is higher but not bad for an unsecured personal loan.  Especially if using the funds short term, there's not too much interest.

@Abigail King  I started with a seller finance, $80k, 10% down ($8K) + $1k in closing costs.

Put about $40k in rehab in it.  Mostly on trade accounts with local businesses for the materials, some business credit cards, some of the contractors were OK with waiting 30 days for payment.  So minimal impact to credit during the rehab process.

It appraised for $173k after rehab, refinanced and paid everyone off including the seller, and walked with cash to do my next deal :)

@Brandon Eike  That's a decent amount to put down.  Have you gotten pre-approved with a lender?  Or working with a real estate agent yet?  I can't speak to Richmond, but when I started out I was able to get referrals to a good agent from a real estate investor group in my area.  The agent in turn also knew good lenders that worked with investors, so that's a good starting point.

Good luck!

@Inderpreet Singh  I use Liberty Mutual for my umbrella and have been very happy with them.  I have the rental properties insured with a variety of lenders and no issues with putting all of them under the umbrella policy.