Posted by Vernon on January 14, 2000 at 21:05:51:
Ed
On an equity line of credit I would assume “seasoning” would not be an issue if the property was free and clear of debt or had a very small mortgage in relation to the value?
Lenders? - Posted by Brian (NY)
Posted by Brian (NY) on January 14, 2000 at 07:12:06:
I purchased a rental property more than 6 months ago. Now I would like to get an equity line of credit on the property. It easily has 30k-40k equity, but the problem is that all lenders I have spoken to tell me that I can’t do anything until I have owned the property for at least one year. The property has a positive cash flow of approx. 480.00 a month that would support any additional financing I put on the property. I need this in order to do my next deal. Has anyone got an equity line of credit before one year?
Brian
Re:If we’re going to do Creative Real-estate, we have to learn CREATIVE FINANCING… - Posted by Ed Garcia
Posted by Ed Garcia on January 14, 2000 at 10:55:48:
Brian:
WMC Mortgage would allow you to refinance the property and get your original down payment
back., but you would have to verify the down payment.
From time to time you will find a lender that will do a none seasoned deal. But that’s rare, and far
and few between. Portfolio lenders will do it if you have a previous track record with them, which
in your case, that doesn’t exist.
There’s always more than one way to skin a cat. What I would do, (considering the limited amount
of information you have provided), is find another good deal. Once I have done that, I would go to
Beneficial Finance, Associates Finance, Avco Financial, and I could go on with the list, and
present my deal to them.
When we get to the part of my down payment, I would tell them, in lieu of down payment, I would
like to pledge another property that I own, as additional collateral.
Another words, CROSS COLLATERIALAZATION. I always recommend when doing this.
That you, request that once the property that you’re purchasing is a year old, that they will re-appraise
the property, and if the property meets their required LTV, which should be 80%. They will release it
as collateral.
Another thing you should do, is make sure you have a release clause that you can release the property
that you pledged for a certain amount. This will allow you to either re-finance that property, or sell it.
the amount that figure should be, would be the 20% down.
The cost of this loan, would be between 11&1/2 and 13% with 2 to 3 points and a pre-pay.
Many times you can negotiate the pre-pay. Some what expensive, but you have just done a deal you
normally wouldn’t have done. Also the profit you make on the new deal, better more than justify the
cost of the loan, or you shouldn’t do it. Also, now that you own the property, you can either sell it,
or a year later re-finance it at a better rate and release your pledged property.
If we’re going to do creative Real-estate, we have to understand CREATIVE FINANCING.
Ed Garcia
Re:If were going to do crative Real-estate, we have to learn CREATIVE FINANCING. - Posted by Ed Garcia
Posted by Ed Garcia on January 14, 2000 at 10:46:20:
Brian:
WMC Mortgage would allow you to refinance the property and get your original down payment
back., but you would have to verify the down payment.
From time to time you will find a lender that will do a none seasoned deal. But that’s rare, and far
and few between. Portfolio lenders will do it if you have a previous track record with them, which
in your case, that doesn’t exist.
There’s always more than one way to skin a cat. What I would do, (considering the limited amount
of information you have provided), is find another good deal. Once I have done that, I would go to
Beneficial Finance, Associates Finance, Avco Financial, and I could go on with the list, and
present my deal to them.
When we get to the part of my down payment, I would tell them, in lieu of down payment, I would
like to pledge another property that I own, as additional collateral.
Another words, CROSS COLLATERIALAZATION. I always recommend when doing this.
That you, request that once the property that you’re purchasing is a year old, that they will re-appraise
the property, and if the property meets their required LTV, which should be 80%. They will release it
as collateral.
Another thing you should do, is make sure you have a release clause that you can release the property
that you pledged for a certain amount. This will allow you to either re-finance that property, or sell it.
the amount that figure should be, would be the 20% down.
The cost of this loan, would be between 11&1/2 and 13% with 2 to 3 points and a pre-pay.
Many times you can negotiate the pre-pay. Some what expensive, but you have just done a deal you
normally wouldn’t have done. Also the profit you make on the new deal, better more than justify the
cost of the loan, or you shouldn’t do it. Also, now that you own the property, you can either sell it,
or a year later re-finance it, at a better rate and release you pledged property.
If we’re going to do creative Real-estate, we have to understand CREATIVE FINANCING.
Ed Garcia
Re:If were going to do crative Real-estate, we have to learn CREATIVE FINANCING. - Posted by Ed Garcia
Posted by Ed Garcia on January 14, 2000 at 10:39:44:
Brian:
WMC Mortgage would allow you to refinance the property and get your original down payment
back., but you would have to verify the down payment.
From time to time you will find a lender that will do a none seasoned deal. But that’s rare, and far
and few between. Portfolio lenders will do it if you have a previous track record with them, which
in your case, that doesn’t exist.
There’s always more than one way to skin a cat. What I would do, (considering the limited amount
of information you have provided), is find another good deal. Once I have done that, I would go to
Beneficial Finance, Associates Finance, Avco Financial, and I could go on with the list, and
present my deal to them.
When we get to the part of my down payment, I would tell them, in lieu of down payment, I would
like to pledge another property that I own, as additional collateral.
Another words, CROSS COLLATERIALAZATION. I always recommend when doing this.
That you, request that once the property that you’re purchasing is a year old, that they will re-appraise
the property, and if the property meets their required LTV, which should be 80%. They will release it
as collateral.
Another thing you should do, is make sure you have a release clause that you can release the property
that you pledged for a certain amount. This will allow you to either re-finance that property, or sell it.
the amount that figure should be, would be the 20% down.
The cost of this loan, would be between 11&1/2 and 13% with 2 to 3 points and a pre-pay.
Many times you can negotiate the pre-pay. Some what expensive, but you have just done a deal you
normally wouldn’t have done. Also the profit you make on the new deal, better more than justify the
cost of the loan, or you shouldn’t do it.
If we’re going to do creative Real-estate, we have to understand CREATIVE FINANCING.
Ed Garcia