Re: 6 -unit financing - Posted by John Corey
Posted by John Corey on May 03, 2006 at 15:50:20:
Using an LLP or other structure might be part of the answer.
More to the point you need to be in line with the lender’s requirements. If they want to seasoned funds and require that the funds not be from a loan then that is what needs to happen. If they only want to see cash at close and do not care to ask about where you obtained the funds (no question or statements about the funds or the source) then all you need is cash at the close.
It is about being straight and disclosing the details that are requested rather than trying to hide something from the lender in 1st. If you know you are hiding something that they did want to know about you have a problem. If the lender is just dumb and failed to ask the right questions (honestly failed to ask) then you are not required to spell it out for them.
If someone else or an LLP is going to be in the deal they will need to be on the title and likely have to be qualified by the lender. With commercial this might not always be required.
If you can find an investor who is willing to loan against something else and the lender does not care about the funds being borrowed for this deal you would be OK. The lender still sees cash in the deal above them.
Be careful with mortgage brokers. Some unintentionally suggest ways of applying for the loan that are not legal. Others know they are cooking the deal. A good one will not let you do something that is illegal (if they know about it) as it reflects on them.
There is a lot of gray in many RE deals so you need to consider if a deal smells right before you put your signature on the paperwork.
Will the seller carry a second for part of the price?