Need Subprime Financing?
This is my first post.
My wife and I have been investing for a year and a half. We have 15 single family homes.
About six months ago, we were abruptly stopped by lack of financing. That is to say, we used up 9 loans of prime and subprime financing, and then stopped getting loans altogether.
We pay cash for houses, refurbish, then refinance the houses. We currently have a unit we paid $112k for five months ago, refurbished and got a valid appraisal for $200k for. We want to refinance 75% of appraisal, or $150k cash out.
We have excellent credit - 815 when we started, +/- 700 now. We want 30 year fixed rate loans at about 6.75%, stated income loans. Mostly all cash out.
Stated income is important.
Can anyone help with financing recommendations?
If your scores are that high I see no reason why you would have to go sub. Do some shopping on the net, I think even e-loan will do a deal like that, especially leaving 25% in the deal.
Once you have 6 or 8 Fannie Mae loans (depending on who you've borrowed from), you need to go subprime.
Hello,
The problem you're having is that most lenders don't want to loan money if you have a number of properties. For example Indy Mac will not loan you any money if you have more than 10 properties. If your have them show up on your personal credit report you have a problem. you need to spend the wealth sort speak by setting up a corporation. I'm not giving you legal advice but this is an option. Please consult an attorney for legal advice regarding a corporation.
The question is can you get a loan? And if so where? How much will it cost you?
Have a good day!
[addsig]
We have 7 prime loans, 4 subprime, and 2 second mortgages (prime lenders). All loans paid on time or early. Right now, we can not get a loan.
Credit Score went down strictly due to inquires, and Fannie/Freddie is on there inquiring multiple times.
I have a Corporation. Have asset protection. Still have a good Credit Score (690 - 710). What I don't have is anyone willing to lend me any money!
We've tried all the lenders in Fresno, who else should I try? How should I apply? Personal? Corporation?
HELP!
Fannie Mae and Freddie Mac lenders do not cater to investors and have limits as to how many properties they will allowed to be financed. Most sub-prime have limits as to how many properties they will finance for each individual investor but not on how many properties are financed. Do not that many sub-prime lenders offer excellent rates that come close to conforming loans for people with excellent credit scores.
Please note that I am a mortgage loan officer and might be able to help you.
There are stated loans perfect for your situation. There are lenders that also hold their own notes and don't care how many you have, just what you have with them...so you are not in desparate situation. Also, one other thing you should consider is, how many units are you going keep for certain, PM with details.
I am a broker also, so maybe i will be able to help you, don't want to over step my bounds if this is an improper post.
if you generate income (not necessarily cash flow) you may be able to contact a bank for a corporate loan. be able to back up your real estate appreciation with appraisals. corporate lenders will understand a full set of financial statements and with your track record of success may lend to your corp without even using your personal credit. it is well worth a look.
another option is to move some of your loans from your personal responsibility to corporate responsibility with a corporate lender and they will move off your credit report, enabling you to borrow personally again. again, if you have solid financials, the banks may lend to you corporately.
i'd like to hear what progress you make in getting this to happen.
also, as an aside question, do you have any issues with chain of title, since you refi so soon after you purchase??
NOO No seasoned Cash out refis have gotten a lot harder to do over the past few months. So the longer you can hold onto the properties before doing a refi the better.
If you want good rates drop the request for stated.
You did not mention what your plans are. Are these properties to be held long term?
If you will be holding them long term take some of the oldest loans bundle them together and get a commercial loan from a bank. That will lower the number of loans that you have. The problem is that to sell one property you have to ask the bank.
You have the credit and LTV that banks like. Bring a detailed cash flow statement from all of your properties to the bank and show what you are doing. Presentaion is key. If your property has cash flow and you do a good job of presentation at a few banks and you will get the money.
If you establish a good relationship with the commercial side you can get a line of credit. With this you can buy and rehab. But it takes time and you have to show paperwork. And it will not happen overnight.