Dealing with loan broker - Posted by John L(CA)

Posted by Brent_IL on October 15, 2003 at 22:16:40:

That’s O.K. when you’re dealing with sellers, but most note buyers won’t bother with it. There are too many better notes available. The buyers who will accept more exotic notes will expect a large discount for their trouble. They’ll get it, too.

Dealing with loan broker - Posted by John L(CA)

Posted by John L(CA) on October 15, 2003 at 10:04:11:

Greeting all.

If I contact my loan broker and ask him to refer me people who are interested in “rent-to-own”. Because they are temporarily can’t get a qualifying loan or whatever reasons they have. Would it be any issue to the law at all? licensee?

I am planning to find l/o deals for them and let my loan officer get them a loan down the road. I may carry back a second to make things easier… does it sound like an idea to the pros?

Thank you in advance,

John L(CA)

Re: Dealing with loan broker - Posted by Brent_IL

Posted by Brent_IL on October 15, 2003 at 13:37:40:

It will work. It’s used frequently. Be explicit about what you want and what you are giving.

By offering to carry your profits on a second, you’re making it easier for the loan broker to meet LTV ratios and qualify your T/B’s. Give him or her a referral fee when you put the referred person in a house, and send them back for the re-fi.

Re: Dealing with loan broker - Posted by John L (CA)

Posted by John L (CA) on October 15, 2003 at 16:31:27:

Thank You Brent IL.

So if I get a good deal in the first place & sell partials on my second carry back, I can make this deal no money down or get money at close?

-John L(CA)

Re: Dealing with loan broker - Posted by Brent_IL

Posted by Brent_IL on October 15, 2003 at 17:28:44:

Well, IF you get a good enough deal in the first place, and IF you can sell partials on the second carry back, you could possibly purchase your deal with no money down or get money back when you close.

The challenge you will have is selling the partials easily. This is where the full plethora of CRE purchasing techniques comes to bear. There are fewer sellers that sell free-and-clear properties on terms than there are sellers who have underlying loans. Your carry-back second is going to sit on top of the other liens, so the LTV isn?t going to be that great.

Your buyers will be proven during the time they were on the lease, but in a typical L/O the T/B?s are stretched. The down payment notes are called throw-away seconds for a reason. In case of default, the cost of taking care of the first and reacquiring the property is usually greater than the value of your note. Buying a partial will give a note buyer a better ROI, but it won?t increase his safety margin. Unless property values are appreciating at a rate of one or two percent a month, a note with an LTV above 90% is worth very little to a note buyer, perhaps, 5% of the balance?

If you can find a way to package your notes to make them more appealing, you might be able to cash out.

Pulling this off is not an easy task.

Re: Dealing with loan broker - Posted by John L(CA)

Posted by John L(CA) on October 15, 2003 at 20:33:00:

if security is an issue here, what about giving the note buyer extra security with additional colleteral? (paper, car, house, etc?)

Re: Dealing with loan broker - Posted by tony

Posted by tony on October 15, 2003 at 20:29:53:

There are companies that will purchase your 2nd note. Most want 1yrs seasoning…and a discount. BUT…if you want to move properties…fast. Hold a second…anybody can get the first.