Cash Out Refinancing Help - Need Banks/Lenders?

The following users voted for this post: Bryan H., Bryan A., Steve B.

Posted: 09/28/2010 at 10:04PM

Portfolio lenders are the only people that are going to touch this. I have looked with no success at this point.

The following users voted for this post: Bryan A.

Posted: 09/29/2010 at 06:23AM

 Yup, if you can find a local portfolio lender, you should be able to get this done (though probably only at 65-75% of ARV or purchased value). As an example, I have a lender (a small bank) in my area that will cash-out refi at 80% of the purchase price (for short-term loans) or 65% of the purchase price plus rehab costs (for loans up to 5 years) immediately after I purchase and/or rehab the property.
So, these lenders do exist...start visiting your very small, local banks...

The following users voted for this post:

Posted: 09/29/2010 at 11:59AM

 Had a lengthy call with a local bank known as "investor friendly".
- They'll do cash out refis (on REO properties that are initially purchased for cash, for example) for 80% of (purchase price + documented rehab expense).
- 1 pt to the lender
- Other costs just $200-$300. They do their own inspection/comps, pay for lender's title and closing costs.
- Rate is 6.75%, 15-20 year amort term, rate resets after 5th year (based on prevailing rates at that time, not directly indexed), and resets annually thereafter. They won't lock rates for long terms on loans they're keeping (very prudent given their funding profile).
- No prepay penalties, so could be financed conventionally after one year seasoning if you wished.

Conventional Loans for Properties 5-10?

1. Posted: 10/26/2010 at 12:30PM
Citimortgage will lend to someone with more than 4 mortgages, but they require a 720 credit score and a maximum 70% LTV:
* 30 year fixed = 4.75% + 1.75 pts, or about 5.375% if you finance the pts.
* Must have 6 mths cash reserves on all properties (Fannie standard)
* LTV will actually go to 75%
* Only 1 and 2-unit properties, no 3's or 4's
* Lender fees of $665 (this is very competitive)
* He stated up front will be lengthy underwriting, having to verify operating results on 5+ properties
* Will loan down to $10K, believe it or not.

2. Posted: 10/27/2010 at 02:53PM
OK, new buy-and-holders, here's what I've found out on investment property limits for largest US lenders.
Wells Fargo -> 4 investment + 1 home = 5
B of A -> 4 investment + 1 home = 5
Chase -> 4 total including home = 4
Citi -> 10 including home (no 3 or 4-unit after 4th property)
GMAC - fell asleep waiting
US Bank - fell asleep waiting
Sun Trust - fell asleep waiting
Provident
BB&T
Quicken -> 4 inv + 1 home = 5
Flagstar -> 10 including home (no 3 or 4-unit after 4th property)

Homepath Mortgage Lenders - investment property purchase experiences?

1.  Posted: 08/06/2010 at 11:40PM
I recently closed on my first investment property using the Fannie Mae Homepath product. I was able to close on the property with reasonable closing costs, 10% down as an investor, and closed within 30 days. I didn't pay any points at closing, so the interest rate was high, 6.25%. I used the big bank, Wells Fargo, for financing.

2. Posted: 09/22/2010 at 09:17AM
 I closed on a Homepath loan in August. It was a really good buy but I had to put 15% down. HomePath changed requirements in August. 3% OO, 10% 2nd Home, 15% Investors. The process was not bad at all. Paid 1.5 points for a rate of 5.25. No PMI, No Appraisal. I did have to buy a survey though.

Investor Friendly Lenders in MA?

Posted: 11/14/2010 at 05:19PM

The following users voted for this post:

I've used mercantile bank...they are a commercial lender...vie refinanced out of hard money into 20 yr notes with them on 3 family properties...they're in Boston...good luck, where are your properties?

Renting Advertisement

1. Craigslist
    * Free but low quality tenants

2. www.renterexpress.com
    * $195 listed to MLS

3. Research to market and listed as lower end of the market price. Renters are usually very price sensitive. $25/$50 would make the differences.

4. Charge for $20 ~ $25 fee for application per applicant
Application fees are not refundable in principle.  This should be written on the front page of application form.  Print in bold letter: "$25/person non-refundable application fee is required for getting the application processed".

5. Always check credit:

    Go to www.youcheckcredit.com to setup a landlord account.

Septic System or Title V

Replacing the septic tank and leach fields 2008-09-06 22:35:15
Septic Tanks and Leach Fields are common in northern states, depends on size of the house, how many bedroom / bath room, each state may have different requirement.
and it also depends on soil sample, your county health inspector need to come out and test the soil, and let you know what type of septic system you allow to install, then they will issue a permit for the work.
a typical gravity fed system on a 3 bedroom /2 bath house needs a 1000 gallon tank and 300 feet of leach fields, cost $3200 to $4000, plus time to dig out the old one.
if the soil test out bad, then you need a mounted system, it will cost $6000 to $8000.

Section 8 Experiences

Exp 1:

I have sec 8 tenants.

sec 8 tenants are usually lower quality tenants, if you have a nice property, don't, but if your house is older but still up to code, go for it.
you have to sign a contract with local sec 8 housing authority, usually the rent is slightly below market when you sign on, but you can request it be increase the second year.
you also need to keep the premise update and meet your local code, yearly inspection is required.
you will guarantee to get paid every month on the spot from HuD, sometimes tenants are responsible for portion of the rent, you make sure you on top of that, because again, these are lower quality tenants.
you will have more responsibility than renting to market, you will need to report move in/ move out, repair must be done within 10 days after report.
so, it depends on how your local rental market go, you have to think about is it worth the extra time you spend on paper work.
I once had 13 Hud voucher, now I still have 9.

Exp 2. 

You need to check with her case worker to be sure that she has been approved, and your rent is within the limit of the type of dwelling she has been approved for.
Also you need to make sure she is a good tenant, clean, no illegal activities.
If you lease to her, the city will send someone for an inspection (mostly safety issues, no broken windows, no peeling paint, proper illumination, fire alarms, etc.) The city will send you payment record to report taxes.
The downside is it is not easy to terminate the lease with Sec. 8. So if you plan to flip the house in the near future, better go with someone else on month to month lease.

Rental Verification

Rental Verification

·        When did the Tenant rent from you? (From when to when?)

·        Was this rental on lease term or month by month?

·        Is this rental an apartment, house, duplex, trailer, dorm, or other?

·        What was the rent amount per month?

·        Did the rent include any utility? If yes, which one?

·        Is there currently a balance due? If yes, how much?

·        Did the Tenant pay rent on time? If didn’t, how many times the Tenant had late payment?

·        Any legal notices served for NON-Payment? If yes, what kind and how many times?

·        Any legal notices served for NON-Compliance? If yes, what kind and how many times?

·        Were there unauthorized occupants on this lease/rent?

·        Were there unauthorized pets on this rental property?

·        Were there any complaints from neighbors?

·        Has this Tenant ever given you or your staff a difficult time?

·        Are you are a friend or relative of Tenant?

·        Did the Tenant give proper notice to vacate?

·        Did the Tenant make any damage in the rental unit?

·        Was the applicant ever asked to vacate the unit?

·        Would you re-rent to the Tenant again?

Carpet Installation prices?

One Ad from Craigslist:
 http://boston.craigslist.org/nwb/sks/2097633602.html
"I get carpet at the lowest price possible and strait from the mills. I have a giant size warehouse with bundles of different kinds of carpets whither it be a $3.25 a yard piece or a $25.00 a yard piece I have it all or I can get it. Install rates start at 4.75 a yard and can vary to 5.75 a yard depending on the material."

 Another one: http://boston.craigslist.org/sob/sks/2097604185.html
"We smash Empire's prices daily! WE NOW CARRY LINES OF CARPET TILE! $2.50 per square foot installed!!!"

Hanscom Federal Credit Union HELOC

https://www.hfcu.org/

1. Hanscom Federal Credit Union Rate is 2.75% (0.5% below Prime) for 75% LTV and 3.25% for 80% LTV. They do a free drive by appraisal if they cannot get the value of the home in the Home Value Estimator. They offer a no closing cost HELOC with the option to lock to a fixed rate. Currently, the best outfit out there.

Landord policy

http://www.fatwallet.com/forums/finance/1034464/

FAQ- The Consolidated HELOC Home Equity Line of Credit thread, and list of BEST HELOC DEALS

http://www.fatwallet.com/forums/finance/150875/

The INVESTMENT / RENTAL PROPERTY thread!!!!!!

http://www.fatwallet.com/forums/finance/59627/

Any banks have HELOC rate < 5% for rental properties?

"
Here are my research results:

TD bank 5% + closing costs.

Wells Fargo 5.11% + mortage tax and title legal fees.

Cash out Re-finance:

Most banks and brokers require closing fees about $4000. Rate: 4.875% 30 yr - +. For closing cost of $1300, Rate: 5.25%.

"

Rental house HELOC

1. "profile bank!not sure it is only in NH or not!"
2. pedfed.org: https://www.penfed.org/productsAndRates/mortgages/homeEquity.asp
Quote: "I tried penfed. They have restriction if you have more than 2 rental houses, they won't lend you money."
Quote: "Try Penfed.com. We applied and get HELOC @ prime rate without a problem.You may need to pay $20 to be the member and $5 to open a saving account before you apply."

Another Example of Insurance Strategies

"I have a single policy cover all my SFH and Duplexes:
Actually it is more of a commercial type blanket policy, extended to all my properties, anytime if I buy a home, it is automatically covered, each property has a building liability of 500k, and a 2m commercial umbrella as backup."

Question:

"How do you get that? Is it cheaper when comes down to each property? Does the premium increase every time when you add a new property?"

Answer:

"1. it is a custom tailored policy.
2. yes a bit cheaper.
3. yes."

Examples of insurance policy

"Each of my rental property has 'Fire&Dwelling Inurance', with $300K personal liability and one year rental income.

with an addtional $2M Umbrella Insurance to cover all properties."

Umbrella insurance

About $240 a year to cover $1M with 2 cars and a few properties.

With at least $300K liability coverage on every single insured item to be covered under the umbrella.

You need $300K liability insurance coverage on every individual property such as car, house to be eligible for umbrella insurance coverage. The higher the individual coverage is, the less chance the umbrella insurance will need to pay. That's the whole purpose in the insurance companies' point of view.

No. Say it is your fault to cause a damage:
The estimate repair/replacement cost is $500K. Your individual liability coverage is $300K and the umbrella is $1M. After using up the $300K individual coverage, the Umbrella is going to pay $200K. If the damage needs $1.5M to repair/replace, the individual policy is going to pay $300K again which is the limit, your umbrella is going to pay $1M as the limit. The remaining $200K will have to be out of your pocket.

"I have said you have to have a certain level of coverage on the individual policy to be eligible for umbrella. Different insurance companies may have different requirement. All State asks for $300K which is what I quoted."

Examples of Landlord policy

LANDLORDS INDEMNITY POLICY COVERAGE AMOUNT PREMIUMS
Dwelling 263,050 551.89
Other Structures 26,305
Replacement Cost
Personal Property 13,153
Fair Rental Loss
Business Liability (each occurrence) 300,000 20.00
Medical Payments (each person) 1,000
Deductibles Applicable
1000
TOTAL PROPERTY ANNUAL PREMIUM 571.89

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