Posted by Brent_IL on September 13, 2003 at 22:46:48:
I think you will have better luck looking for private money, or using a HELOC for financing. I know from personal experience that bankers don’t get too excited about using mortgage liens as collateral, so I imagine that tax liens would be even less desirable from their point of view. Tax liens are steps away from the collateral. The loan would have to remain in-house because it would not be readily salable in the secondary market. Quantification would be problematic. I think your bankers did understand what you wanted. They just didn’t want anything to do with it.
I wanted to buy approximatelly $100,000 in tax lien certificates this year. But I don’t want to tie my money up for years. Could someone please recommend a Bank that will loan against Tax Lien certificates. I am in Colorado, but I don’t care where the Bank is. I already talked to my bank about this, but they didn’t understand (and I think it would be a waste of time explaining it to a Bank that doesnt already lend against Certificates). I don’t expect to be making any money off of the interrest rate spread, I will be focusing on properties which I think will go to Deed.
Posted by JT-IN on September 14, 2003 at 05:44:15:
JD:
You need an unsecured commercial LOC from which to operate such purchases. You will need to pledge both personal and business assets, blanketed, in the event that you default on the line.
Suggest you meet with a Commercial Lender from smaller, regional Banks, with an outline in hand of what (how) you do to earn a living… Be specific enough, but yet understandable to a layman who isn’t in your business. I’d leave out much reference to the buying of the Tax Liens, unless you have had some documented success with owning these, that have gone full circle; purchase of lien to acquiring property to liquidation of property at a nice profit. If so, then weigh in on that too. Also include a copy of net worth and other supporint financial schedules for cash flow. Include page 1 and 2 of 1040 for past two years, or at least a summary page that lists what the income was year by year… This way, at a glance, a Comm’l Banker can know whether they want to pursue your business. Also having all this together, in a concise handout, speaks well of your organizational and business approach. This all adds to your persona of a good risk.
Make it a point to have several such appts per week, until you strike up a workable relationship with the Banker that sees you as a long term client,and your viewpoint that they will meet your needs.