Posted by jafon2k(NY) on September 16, 2006 at 09:57:34:
Yes small local bank but won’t they want you to have two years as a business?
And how do you get around that?
refinancing rehabs - Posted by Jim In Indy
Posted by Jim In Indy on January 29, 2001 at 10:02:47:
I have read several posts about investors that refinance a rehab to recoop initial costs, repairs, put cash in their pockets, etc. How is this done without “seasoning?”
Re: refinancing rehabs - Posted by Ed Garcia
Posted by Ed Garcia on January 29, 2001 at 11:27:43:
Jim,
In most cases they are using local portfolio lenders who service their community. The investors on this board see all of the lenders as being the same. I’ve been trying to teach them how to distinguish the differences between the lenders.
If you are a strong borrower, and go to a local lender or bank who is a portfolio lender ( meaning they make the loan and keep it), there is a chance you can get the financing unseasoned. The reason is, a local portfolio lender will not be afraid of the property because they have a good qualified borrower and the property is in their back yard.
As a matter of fact, I teach investors in my workshop to find a small local bank in their community to do, just what we’re talking about. Have the bank provide you a working credit line to perform this task. The bank sees you doing this as a BUSINESS, and you’re not just an investor who is investing by chance, with no rhyme or reason. They know what you are doing and how you are doing it. When asking for a working credit line, you are now presenting this as a BUSINESS with a game plan, and not just an investor pulling equity out to put money in your pocket, leaving them high and dry.
Going to a broker for such a loan is going to be more difficult because, the lending sources that most brokers use, are National lenders who sell their loans off. They also are more concerned about seasoning, because many of them have had a major delinquency factor with unseasoned loans.
Jim, from time to time I hear of a lender who is swinging and does unseasoned loans. I have yet to check them out, to only find what I’ve just told you to be true.
If you think about it, what lender in their right mind would want unseasoned loans as a steady diet? They may do a deal here or there. But the reality is not on an on going basis.
Ed Garcia