Trying To Get A Mortgage On Property

My business partner and I have a property in my name- free and clear (as far as any bank is concerned), because we have an invester who put up the money to buy and fix up the property. The idea was that when the property was finished, we would finance it in my name, pay off our invester, and split the profit. We decided to keep the property as a rental so we didn't have to pay Capital gains taxes. We now have it rented with a signed year lease. The problem is, my credit has taken a real nose-dive (about 504) because I've gotten behind on my own mortgage. Our invester is willing to co-sign, but does not want the property in his name. We're running into a couple of problems, my credit score, and the fact that the property has not been "seasoned" for a year yet. We have about 4 months to go before we will have owned it for a year. Does anyone have any suggestions on what we can do to get this property mortgaged?

Comments(4)

  • choosetothrive8th June, 2004

    Tell me the particulars for the property,
    market value, rent, cost and rehab expenses so far and we'll go from there

  • active_re_investor8th June, 2004

    Your credit is such that holding it as a rental looks less likely then it would have been if the credit score was better.

    1. Consider selling, pay the taxes and get the credit sorted by bring the bills current.

    2. Get your name off the property. Hard to suggest how best do this without knowing the numbers, the ratios, etc.

    3. What about your partner?

    Having an investor who will cosign is a great plus. Maybe not all that useful this time around or maybe the secret to the solution.

    At some level you are getting too greedy by trying to minimize the tax by holding when you do not have the credit to make it work. Hold later when you are better set up. Definitely think of selling.

    Alternatively you need to get your name off the loan app. Your score is just too low if you want a decent deal.

    John
    [addsig]

  • blhull8th June, 2004

    Market value is around 85k, we bought it for 35 and put 27500 into it. We are receiving 695/mth for rent. I think that addresses all the questions... let me know if you have more.
    Thank you!!

  • cjmazur8th June, 2004

    what do you need to get out to pay off the investor?

    I get a 67% basis/sale based on the numbers you provide.

    How is your partners credit?

    I would be leary about having the investor money in the deal. Use that money for the next deal, and hold this property.

    Alternatively, is the tax on 11K that much?

    What did the debt service from the investor cost?

    I bet if you looked around you'le find more that 27.5 in receipts.

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