Financing A Deal?
What would be the best way of financing an investment property without using hard money?
We have great credit of 810 and want to purchase investment properties,is it best to go thru the bank and do they have loans for this ,or another avenue?
Also, should we get a large loan to do several at one time,or do them individually?
Thanks
It may be difficult to answer your question without more information. You did not indicate what you will do with the properties when you get them. If you are looking to hold them long term you will want some long term stable financing. I almost always go for 30 year fixed loans. These have been 80%, 90% and 100% loan to value ratio loans. I am not sure how available each of these are at this time. My preference here is that each property has its own loan(s).
If you are going to flip or buy at a deep discount and refinance, a Home Equity Line Of Credit (HELOC) may be good if you can get one. The key here is that you can pay down the HELOC upon flip sale or re-fi.
I hope this is of some help. Perhaps you can tell us a bit more.
edmeyer is right. For flips I use some HELOCs we have. For hold and rents we buy with the HELOCS, rehab and then refinance on 30yrs or get a HELOC on the property
WIth your scores you should not have much problems.
If you are intending to hold short term - less than 5 yearsor so usually, then try the no closing costs loans like Bank of America, Citibank and some others have. I did the calc and even with the slightly higher rates those loans carry, it is cheaper ultimately. If you are going to hold more than 5 years or so then get the regular 30 year loan.
check out Credit Unions. They have some very competitive HELOC rates.
I would go straight to private lending. Friends family and associates. Offer lenders competitive interest rates, but first get them to commit a figure to you that they are willing to lend you. 20k 50k etc. For max 2 yrs @ 9% ? 10%? How good your deal is determines interest paid out on a monthly interest payment only. Cash out balance when deal sells. Keep the 810 credit score for the BMW! With Private lending, no closing costs ie: app fees, points, appraisals, etc.
Lender wires funds to closing table...close. All part of your negotiation to seller of fast cash closing get another 10% off! maybe 15%.
Private money...it never hurts to ask and you are providing a great return on investment to people that would never get the chance to earn that type of interest.
Good luck
Mike R
This is very highly regulated, esp. if you want to charge HML usurious rate.
in CA you can get a Consumer Finance license quit easily which exempt you from from usary laws.
You might want to check is the states in which you want to do business and such an alternative to a mortgage brokers license.
Well, the smart-ass answer is, hope they do violate state or fed law, then you can have the debt declared illegal.
The laws here are very pro-consumer. I have never seen any laws that the consumer had to worry about.
Quote:
On 2007-10-28 21:46, cjmazur wrote:
Well, the smart-ass answer is, hope they do violate state or fed law, then you can have the debt declared illegal.
The laws here are very pro-consumer. I have never seen any laws that the consumer had to worry about.
Huh?
The SEC is a federal agency and as such any securities laws you might be concerned with will be federal law rather than state law specific to WA.
Activities that might get you in trouble with the SEC involve marketing and pooling money. Marketing across state lines and pooling money from more than one investor to purchase your real estate would raise red flags for the SEC.
Ah, now that answers my question, thanks!
WA usury is 12%/year? In what decade was that enforced?
Bottom line is that you cannot advertise. You can only talk to people in your "warm" market. And they must be accredited investors. NEVER list a rate of return anywhere publicly.
Ok, why is that?
State and Federal Security laws designed to protect the general public from scams.
Google reg d
and it might give you some insight on how to use Reg D to raise funds.