HELP! REO question ~ we are buying w/cash - want to refie for equity. Ideas on lenders

I have heard that you can't refi if it is your primary and you have owned it for less then 6 months. However, refi-ing investment property is even harder.

I would call bunch of mortgage brokers in your area and see if they can pull some strings or lie a little if need be.

Yuri

Thanks Yuri...ugh! that was the plan...i will get on the horn. anyone else have an idea?

At the conference in Phoenix Nathan Street talked about hard money and financing. He shared awesome information, including the name of a no-seasoning re-fi company. Dont know what areas they cover but here it is: Paramount Funding - 1-800-578-3880. He said he found it on a site called scotsmanguide.com I havent had time to check it out myself yet - but wanted to share. Maybe they will be your answer - or at least help you find it! Best of luck, Laura

Thanks laura! I will look them up and call on monday. will let you know how i make out!

Hello, congratulations on making the offers. Go online to Google and look up "hard money lenders". You should be able to find a few that will work with you. Just review the rates and the facts because each one may differ. Also, approcach local banks in your community and see if they can help. It is a numbers game and the more you go to the more inforamtion you can gather for future deals. Get business cards of all your contacts for future deals and questions. Also, if a local banker tells you no, ask if they can refer someone. The more you ask the closer you will be to your goal. Believe and achieve!

I am actually in the same position as you Margie. I am closing next Friday on a deal with cash that includes hard money from family and friends. So I will also be contacting Paramount Monday myself about refi. If I can refi quickly at a good rate i can consider renting or lease optioning instead of flipping, which i would love to do. Really looking to getting some passive income going. We'll have to keep in touch and between us we'll find a solution that works!

let me know how you make out and i will do the same. thanks for everyone's advice!

Margie

bellapalazzo, this is exactly what we are looking to do also. Lease Optioning is, in our opinions, the way to go for our area. So many people have had foreclosures but still want to own their own home. So we are trying to find a way to purchase a property with hard money (50-60% FMV), refinance to 80% appraised value, take the cash out to pay back the HML, do repairs, pocket a little, and get someone in with a Lease Option.

Everyone tells us that (at least in CA) there is a 6 month seasoning before you can refi. We are VERY interested to see what you and Laura find out!! Thank you for sharing. I also wrote the number for Paramount Funding down and plan on calling, also. (Thank you for the info, Laura!! )

lets stay in touch on how we make out. I did hear back from Scotsman...they said to just place your lender needs on their site and they will contact us...I am going to start with paramount as well

Margie

I just spoke to Paramount Funding regarding no season refi. They do work with NJ investors - so thats a good start for me! She told me the house has to be complete and finished before I contact them. They will require some income info but it is mostly based on equity in home. Approval will take 72 hours, loan can close in approx 3 weeks. Not bad! I did forget two important questions and have left a message for answers, and those are of course what rates they have, and also do they order appraisal or do I have it done before I contact them again. So I'll update that info when I hear back from her. Moving along!

how did you make out with them laura?? we have about 7 offers that should go through...i will call tomorrow and hammer them for more details. let me know if you found out anything else!

Thanks, Margie

Margie - I am so glad you posted this! I have had so much going on I completely forgot about contacting them again! I went to local banks and they all will only refi 75% of PURCHASE price, not market value - so I thought I had hit a dead end. Just too much going on for my brain to remember it all. So thanks a MILLION for reminding me of this - my house will be done in a couple of weeks - so I am going to call again. I promise I will post my results in my journal - Laura J's Journal. Its the only place I remember to put stuff these days! So keep a look out there. I will call them sometime next week!
All the best,
Laura

you bet! just emailed them...i am taking the commercial angle with the homes being used for hospitality....that is what we do with estate properties...i will let you know how i make out. their web site states 90% LTV on commercial and 80% LTV on residential.

Margie

Just a thought here, but I have heard that if you have a stellar credit score (above 720) you can be considered before 6 months if you have less than 4 investment property mortgages. Contact as many brokers as it takes. Also dont forget to try local credit unions. I will monitor this topic because I would love to see how this lender mentioned above works out on residential properties.

Regards,
Tony Tomasek

they did get back to me...said they do not have anything to offer me on this tactic...hard money lenders may be the way to go....anyone's thoughts?

Margie

Banks won't allow you to flip an REO to an investor after closing,but I have heard on some Webinars on REO cash sale from Banks,that if you are going to make a profit from the sale to your investor,talk to your investor and see about putting your investors name on the contract before closing. If so call the bank and add your investor to your contract.So when you close with the Bank at the Closing table,after you close,you can use a Quitclaim form to sign your interest in the property to your investor and get a check for your profit and you don't need title seasoning.Do some research on this and be (Transparent on your transactions).

Good Luck & Good Investing

A bank can't control what you do with the property after you've purchase the property from them directly yourself in a cash transaction. Title seasoning only comes into play if your investor or other end buyer is using conventional financing (e.g FHA, Feddie/ Fannie Mae, etc) and not Cash from their own reserves or someone else. Your end buyer has to find a bank (small community lender) that doesn't require seasoning of title to complete the deal. Now the bank can control assigning of the contract which is what big banks & some others are doing.

Thanks for the info,good to know, I am a nebie at this,that is why I posted to do the research,I wasn't quite sure. thanks again for the info.

Here's to great Investing

here is the deal...our cash buyer is from their own reserves. i want to keep the property myself and lease with option to buy for the future...keep cashflow for now...i want to get my investor out of the picture quick by giving them a small return on their initial investment. my revocable trust in currently on the contract and plan to leave it that way...with a clause that states, trustee vesting tbd at closing. this leaves it open ended for the close. my solution that is still outstanding for me is, getting the equity of the FMV out of the property to pay them off and keep the property myself with a very small monthly payment, hence positive cashflow.

any thoughts?

anyone have the hard money lender list they would like to share???

Thanks in advance! margie

Do you have an escape clause in your agreement with the investor,if so,cancel out the contract and find a hard money lender to cover the purchase and closing cost,if there is enough equity cover everything so you can payback the hard money lender. Is the investor willing to let you buy them out of the deal,because the investor will become the new owner of the property at closing.The only way I see you controlling the property is to get the investor out before closing.

Good Luck & Good Investing

Hello,
bella you are using a trust,What protects you...Can hurt you! It seems you want your cake too,And there is nothing wrong with that.Your deal is your voice...I hope your deal,Speaks Load!

Thanks for sharing all this information. I am still learning in this area.

Sandra

Rosefield, not following you on your comment. of course i want my cake. are we not all in it for the cake?! my investors are still making a nice ROI, i am supplying people the opportunity to lease with an option to buy in nice neighborhoods and i am making a small bit of money in the beginning and hope to make even more on the deal after they sell.

actually, the trust purchase agreement came directly from Dean's site. one his his very successful students does it this way and it is perfectly legal, smart and you in are in full protection, as well as, have time to determine to whom the deed will be issued to after you secure.

do your research, you may find it useful.

How can a trust protect your assets if creditors (or collection agencies) can force you to remove your assets from your revocable Trust?

Hi Everyone,

I also am in the process of refinancing a property out after using my business credit line to purchase and rehab the property. I am using a seasoned person who used to be a vice president of a bank (First Commonwealth). Here is some info she gave me,

Your exactly right. Banks didn't want to get involved, immediately after purchase and renovations, due to mechanics liens. To be on the safe side, I would make sure your getting Release of Liens signed. What you want to do is: tell the attorney that your getting your title insurance through that you will be doing renovations. They will tell you the process they need you to follow so that they can issue title insurance to a bank, when you are ready to finance. This is a very important step if you plan on buying and renovating with your own money. When you buy, using bank money, the bank automatically comes before any future mechanic liens.

Thanks Melanie, I was told a few months back that banks where not wanting to refinance out investors after they used thier credit line to buy and renovate a property. I would like to continue to do this. Just was not sure with all that has been happening in the banking industry.

Evan J.Christon

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Hi Evan - where we are now is:
1. you need to use your credit line or cash available as a 20% down payment on the house. The bank provides 80% of the purchase price.
2. you need to have enough credit line or cash to then renovate the property.
3. once the renovation is done, the bank will inspect the property and give you back all, or a portion, of your renovation costs.
OR
1. you buy and renovate the property totally on your own, then we go to the bank to get your funds back.

Does this help?

I hope this helps and here is a very good Hard Money Lenders who are investors themselves:

http://www.equitydevelopmentcorp.com/