All Forum Posts by: Trenton Jackson

If you're willing to pay a higher interest rate, you can get non-conforming or hard money loans that will put the mortgage under an LLC. Expect to put 25%-35% down based on your real estate experience and credit and also expect to pay higher origination fees at closing.

If you have more questions feel free to reach out. 

Reach out to me via PM. I can help.

Patsy Waldron is thinking* Sorry. Posted from my phone and autocorrect got me.

Patsy Waldron tie junking of the old rules. The PMI drop off for the loan is no longer the case at 20% of loan to value. FHA rules changed within the last year or 2. I wish I could direct your to the specific HUD mortgagee letter. But I do know at this point in time, Anything greater than 90% LTV is for the whole term of the mortgage and less than 90% LTV is for 11 years. Check this HUD link for more info http://portal.hud.gov/hudportal/documents/huddoc?id=15-01mlatch.pdf You are allowed to refinance from an FHA to a conventional loan product but as others have pointed out max LTV is generally 75% for a cash out. I hope this info helps you in your endeavors

As Matthew Schroeder mentioned you might want to think of it as "asset based lending" rather than equity. Equity would imply that if the property appraised for $3.5MM and purchase price is $2.6MM you would be able to get a bigger loan amount on the asset based on the equity present in the property. In this scenario you reduce your required down payment as the lender will generally do 65% of value or 90% of cost max. Based on those figures you would be subject to 65% of value and a loan amount of 2,2750,000, which would mean a down payment of $325,000.00. I present this scenario for illustrative purposes to help you in your endeavors. But take the advice of Jay Hinrichs . Expect to put 30-35% in any stated income program which is essentially what you would be looking for.

My advice is to keep looking until she locks down a contract. Possibly put more money down in the contract towards earnest money to show she's just as serious. There are many factors that can dictate as to why a seller accepts a contract. Cash buyers generally push prices down as low as possible with the promise of closing quickly. If she can out show she's serious and put in higher offer and the numbers still work some of those sellers may prefer to wait.

Chris Mason did a wonderful job already answering your question. Feel free to reach out to me in pm or my email. I'm licensed down in Florida and my company lends there as well

@Russell Pitts depending on where you're looking to purchase I could help you find a lender to meet your needs. Shoot me a message. 

Originally posted by @Megan Aldridge:

I'm a conservative investor, so I favor the 30 year loan with no pre-payment penalty.  It still lowers your payment by a couple hundred which hopefully improves your cash flow.  On the flip side, re-financing can be a good opportunity to cash out for a new investment which is something to consider as well.  So you could refi that prop and then cash out what you may need for  down payment or rehab funds on a new project.   I always favor spreading out the loan because I figure if the "stuff" hits the fan, the lower payment will be easier to handle.  

 Completely agree with Megan here. When you have a 30 year with no prepayment penalty what's the point of subjecting yourself to a higher payment with a 15 year mortgage. With the 30 year option you have the ability to pay a lower payment and if you want to pay it off sooner just put more money towards the principal every month. 

Originally posted by @Paul Amegatcher:

60 for you / 40 for him.  Maybe even less.  I understand that he is bringing some capital to to game but he is not handling any of the other duties or day to day operations.  If you have 100K available you maybe better off with a hard money lender than a partner who is not really involved in the operation.  I would go to a 50/50 split if he brought all the money and you brought the deal and knowledge to the group. Just my two cents.

Paul

I agree with Paul. You should be compensated with something for your time, effort and management of the investments and projects. A 10% management fee is reasonable. It's good to hash this out before you get started. 

And also as Paul mentioned if you have that much capital it might be better off to just do smaller deals and start on your own with hard money or conventional financing. More money is great but if you were thinking about getting financing only in your name anyways what's the point of having the investment partner? Also in a traditional mortgage scenario you have to source money received for the most recent 2 months. Any deposits over $500 have to be explained and gifts for the down payment on a house have limits and generally can only be received from a blood relative. 

Good luck in your venture!