All Forum Posts by: Tom S.

@MJ Richlands Sorry to hear.  Just curious, what was the reason why no lender could get it done?

Here in VT, most areas are considered rural and I've had good luck with my local banks or credit unions that know the subject property (very small towns!)

@Maddy Pape  Just adding to the good advice posted above.

I've bought a number of properties via seller financing.  The main tips:

- Get it appraised.  The seller won't require an appraisal like the way a bank would, but you want to make sure you're not overpaying.

- Use a good attorney for the paperwork that has experience with seller financing transactions.

- Do your due diligence: you want to make sure the property isn't full of problem tenants or code violations, and the seller is just using the financing to dump their property and problems onto you.

Hope that helps!

@Mark Enis I'll let the other experts chime in, but my understanding with a conventional mortgage, they don't want any part of the deal to be borrowed funds.  You may be able to close and then do the 2nd mortgage afterwards, however.

@Ryan Fox As you've read, there are lots of pros and cons on BP on this subject. Personally I've kept my properties out of LLC's and just used the separate business account and an umbrella insurance policy.

Most people says there's little chance that transferring the title to the LLC will cause the note to be called, but there's always a chance. And if you have to refinance down the road, you'll probably have to transfer the title back into your personal name for that (most conventional lenders won't allow you to close directly in an LLC). So that creates a pretty easy paper trail for lawyers to find if you are sued.

Again, your decision and I'm just posting my approach.  I've always kept my properties to code, addressed any issues brought up in insurance inspections and run it has a good business.  I've never had any lawsuit threats over 20 years.

@Tim J. I have a 5 unit in that area and use Union Bank up in Morrisville.  Also another commercial loan with Bar Harbor in Randolph.  I can't say if they'll beat that rate, but keeping it local has been good for me overall.  Definitely try calling them and asking for the commercial lending department.

Nice on the $650k valuation, prices definitely have appreciated sharply over the past few years!

@John Asher  For my last new mortgage, they requested copies of bank statements / cashed checks for all rental properties I own - all don't report to my credit (some are small banks that don't report, others seller finance).  So 12 months for each property, 36 pieces of documentation, to prove payments were being made on time.  I also had to come up with a copy of the original seller finance notes.  

So yes, that level of documentation is definitely possible.

@Eric Lind   Just adding, if your statement balance is $45, you should be able to pay it off within a few days after the statement is issued and not pay any interest.  Then do a new charge before the next statement closes and pay off that one after.  You shouldn't be paying any interest and still show activity.

@Jake Salisbury  The Chase INK business cards are good, there a few different ones.  Most have 0% intro periods and earn points for the Chase Rewards program.  I've applied for and been approved for 2 different Chase ones over the past 2 years and have been happy with them.

@Srinivas Reddy  Yes if you can, as you might get a multi policy discount.  Just call around and get some quotes.

I started with Liberty Mutual for all of mine once upon a time.  At one point they stopped writing on investment properties (for me at least in the state of VT).  Then on any commercial properties.  

So now it's a mismatch of insurers, and I'll prob circle back soon to get all under one agency again.

Good luck!

@Amber Douglas  Usually for small loan amounts like that your best source will be small local banks or credit unions that know the property in question.  

Check to see if there are any purchase + rehab options. I've done a series of smaller loans like that with my local banks in VT. For example, purchase of $50k, rehab of $25k and ARV of $110k. The loan converted to a standard mortgage after the rehab was complete, so no need to refinance or do a second closing. Less points and closing costs with a local bank as well.