Posted by Bobby on October 29, 2000 at 15:33:59:
Hi Jeremy,
Thanbks for your help…I thought I was on the right track but needed to make sure.
Bobby
EQUITY LINE OF CREDIT ON NON OWNER OCC. - Posted by ERIC
Posted by ERIC on October 13, 2000 at 10:07:27:
DOES ANYONE KNOW OF LENDERS WHICH OFFER EQUITY LINES OF CREDIT OR SIMILAR ON NON OWNER OCCUPIED PROPERTIES?I OWN FOUR PROPERTIES WITH AN AVERAGE LTV IN 65-70% RANGE.I WOULD PREFER NOT TO REFINANCE DUE TO HAVING PRETTY GOOD RATES ON THESE NOW. ANY INPUT WOULD BE GREATLY APPRECIATED.
Re: EQUITY LINE OF CREDIT ON NON OWNER OCC. - Posted by Ed Garcia
Posted by Ed Garcia on October 13, 2000 at 10:41:29:
Eric,
I’d like to caution you that when using capital letters on the net, it’s considered hollering. I’m sure you’re unaware of that other wise you wouldn’t be doing it.
Now to your question.
Eric, I teach investors how to get what we call a “Working Credit Line”. This type of line is designed to purchase investment properties. To go out and pull down an equity line on each property as you’re suggesting, can be done, but the LTV would be between 75 to 80% and wouldn’t do you much good.
My suggestion is for you to approach a small local bank in your community and request a credit line to purchase investment property. I direct you to a small bank, because they are more flexible and you can establish a relationship with them a little easier because of their size. If you go to a larger bank, they will just give you a number and because of centralization, are impersonal and you won’t have direct contact with the parties, who are making the loan determination on your deal.
Getting this type of line would depend on a business plan you present to the bank, telling them your usage and need for such a line.
Ed Garcia
Re: EQUITY LINE OF CREDIT ON NON OWNER OCC. - Posted by Bobby
Posted by Bobby on October 13, 2000 at 19:06:57:
Hi Ed,
My wife and I have an offer in for a residentual home it looks like this:
Year built: 1984
House: 3Ba/1 Ba, good neighorhood as it is around the corner of our house…there for the neighborhood has to be go right??? anyway this is what we offered:
Asking price: $69,900
Offering price: $53,000, fair market value for up the street.
We offered 10% down of $5,300 but also asked for $5,300 in escrow for credit on landscaping, etc.
1st Mortgage: $29,150, remember we asked for credit back of $5,300 in escrow. rate 9.5%, 30 years.
2nd mortgage: Promissory note given to seller at 8% for 36 months interest only, $23,850 baloon at end of 36 months. We have option on first right of refusal on note should seller decide to sell or discount it prior to end of 36 months.
Taxes: approx. $30 month
Insurance: approx $30
Misc: $20 month
utilites paid by tennent or person lease optioned house.
It should rent for $575-$600 per month.
House is in very good conidtion, new carpets new kitchen and new paint.
Story of house, husband died, now spouse has terminal illness. I can relate as I am in remission from Cancer myself…I wanted to help her and myself in a win, win situation…I hope I did as there have been no offers on this house in almost a year and only two people plus my wife and I have even asked to go inside to see it.
Have I done okay on this deal how could I have worked it better for both parties…the cash flow should come to around $150 to $175 per month…should I lease it out as appreciation here is only 2% a year or should I lease option it out?
I’m kinda new at this and don’t know if I have done everything right…buy the way realtor could not figure out us getting credit in escrow for $5,300, I am not a realtor so I thought it funny that we had to educate how this was done…first of all I told him one just ask for it and hope you get it approved…I could not get it if I didn’t ask for it. at least this time I have a chance of getting as it’s gone to seller on monday and senior broker understood what was happening…addendums are great to use.
anyone can join in on this so we can all learn from my mistakes or sucesses…that’s what this site is about right.
Best to all,
Bobby
Re: EQUITY LINE OF CREDIT ON NON OWNER OCC. - Posted by Jeremy ,WA
Posted by Jeremy ,WA on October 29, 2000 at 11:40:24:
Sounds like you have the right Idea. I have found in my real estate ventures that a contract with the seller is a down payment. Banks will usualy jump on loans that they only have to lend 50%-75% of the homes market value.
For example, you may have heared of a no doc. (document)loan. This is where someone puts a down payment of 30% or greater. Banks usauly only have to do half the paper work. No need for credit checks or employment.
Also, if you dont want to pay the closing cost just make the selling price $3,500 more. And then have the seller pay $3,500 at closing. A bank wont finace the closing cost. So this works will. Always remember that the less money you put down on your investment properties the greater return you have made.
Good luck, Jeremy