unseasoned refi - Posted by Kevin Subbert

Posted by Kevin Subbert on January 20, 2001 at 01:33:43:


Thanks for the advice. I would like to point out that my exit strategy didnt really change, but rather, went back to my original intentions that I had when I first heard of the location of the property. I wanted to hold the property but because I didnt have the knowledge to put the deal together to satisfy the cash needs of the seller, I had to go the route I did.

The seller had originally agreed to take 94,500 cash. I countered with 100k owner financed. Since he owned it free and clear he took it but added a 1 year balloon. That is where my exit stradegy changed. It was still a good deal, so I took it.

What I should have done was have the seller create a note with more favorable terms to me and have him sell it at closing for 94,500. But, Im just a rookie and at the time was unaware this was an alternative.

But, alas, if I must sell, then I must. I hate to lose a 500/mo cash flow but the $40K will help me get started.

Thanks again,
Kevin Subbert

PS- Im not complaining or defending myself. Im just posting this out for the benefit of others.

unseasoned refi - Posted by Kevin Subbert

Posted by Kevin Subbert on January 19, 2001 at 23:28:19:

I recently purchased a sfr to do a rehab and sell retail. Seller carried 97.5% with 12 month balloon. I am now considering holding it as a rental. Anyway I can do this? I just bought it in December so the title is unseasoned. The seller isnt budging. I would like to finance 115,000, 97,500 payoff and the rest to cover the repairs that were done. The fmv is 155-160 so I would need about 75% ltv.

Kevin Subbert

Re: unseasoned refi - Posted by Noel

Posted by Noel on January 21, 2001 at 17:32:39:

I just did a unseasoned loan to nonowner occupied at 70% of mv, with GMAC mortgage. Call at 708 349 7707. Ask for Sanette Isa. Hope this helps.

Re: unseasoned refi - Posted by JPiper

Posted by JPiper on January 20, 2001 at 24:42:16:

I think the general guideline is going to be that you can refi some percentage of your cost + repairs…unless you can actually locate someone who will do a non-seasoned refi. Maybe Ed will have some wisdom for you on that score. Hard money won’t work for you as mentioned below…they won’t go that high in LTV. A portfolio lender maybe.

I would probably go the direction of leaving the first in place for now. I wouldn’t have expected the seller to change his deal made just one month ago. Instead, I would look for a second mortgage for the amount of the repairs. I’d try to small banks first…and follow that by trying the finance companies like Household if I failed at the small banks. As you move closer to the one year balloon you could do a refi at that time.

I think you’re seeing though that the financing that was perfectly fine for a rehab doesn’t work for a rental…and that’s your underlying problem here…that for some reason you changed your exit strategy dramatically from “sell” to “hold”.

One other consideration that may be here is the Texas law concerning second mortgages. I’m not familiar with that law so my suggestions above should be conditioned on whatever that law may say.


Re: unseasoned refi - Posted by James Searle

Posted by James Searle on January 20, 2001 at 24:04:04:

Have you considered a hard money loan or a local bank may offer you a portfolio loan if your credit and income is good…
Regards James Searle