Posted by Larry K -AL on April 17, 2006 at 08:28:45:
I just read the prior post “LLC Financing” which helped some. I wanted to add to anyone that may reply that I have a LLC that “my” bank allows me to run everything through, but the conventional loans I cant. Due to my growth, I want (need) to shop around more and not have all my “eggs in one basket”. This may not be the best idea. Hopefully Ill get some good information at the convention on the whole financing issue. I just needed some immedate direction.
Originally Posted by Larry K -AL-GA on April 16, 2006 at 17:13:01 on news group:
I was buying properties using a 3yr or 5yr fixed loan with a rate of about prime + 1. The closing cost are low and it is a “commercial” loan and does not show up on my credit report. With the recent rise in rates I realized I could get a conventional 20 or 30 yr mortgage fixed at 6.25 to 6.75% vs. the short term at 8.5 to 9%(ouch). The closing cost are higher but you get that back in the first 1-2 yrs. Here’s the problem. I found out that you cant have over 10 loans (conv.) in your portfolio and the fact that they show up on your personal credit is not good. Im currently looking at a $65-$70k deal. I can get a conv mortgage at 6.5-6.75 but a comm loan at my local bank would be 8.5 to 9. It seems like a given which route to go but Im attempting to step up my volume and need a plan. Any help would be appreciated.
Re: Financing question, comm loan vs conv mortgage - Posted by Ben Carmona
Posted by Ben Carmona on April 20, 2006 at 17:06:05:
Larry,
Mortgage lenders that brokers use can still get you good terms for your investment properties once you reach the “10” limit.
It really depends on the ltv you’ll need.
Having multiple mortgage’s on your credit does not neceassarily bring down your scores. I have several clients that have 20-50 properties on their personl credit reports. Scores are in the low 700s.
We just did a 70% cash out refinance for a client at 6.75% on 30yrs. He owns 30 properties, 720 score, no prepay, and goes full doc. Since he was holding the property long term he chose to take the lowest rate and pay more in origination, $1,500.