Which first - the offer or the financing? - Posted by New_To_IL

Real Estate Investing Real Estate Financing
1

Posted by New_To_IL on March 01, 2001 at 12:40:40:

You seem to have a good reputation around here, Ed. :slight_smile:
I’d be willing to have you prequalify me (I guess if there’s any problem, it’s better to find out now rather than AFTER I’ve made an offer!)

I’m interested in buy-and-hold SFHs ($40-$70k range), small multi-families ($10-40k per unit), and possibly small apartments (10 units or so). I’m in Illinois.

Just tell me what to do. Thanks!

2

Which first - the offer or the financing? - Posted by New_To_IL

Posted by New_To_IL on February 28, 2001 at 01:09:09:

I currently have a couple of rental SFHs, and would like to buy more, however due to these plus a low income (debt to income ratio), I know I will have to get sub-prime financing; my credit is excellent however.

I would like to get the highest LTV NOO possible, 100% preferable (maybe an 80-20). I guess the question is, how can I start writing offers without knowing exactly what financing I’ll be able to get? Can I write an offer to purchase with “a combination of downpayment and new financing” even if I don’t yet know if I can get 100% LTV or 90% with 10% down or 80-10-10 or whatever?

I have a feeling that if I ask a loan broker what I will qualify for, he’ll say “tell me about the propery, is there instant equity, etc.”

The point is, if I’m making offers correctly, then I have to make MANY of them, and I don’t want to stop and consult a loan broker on each one, knowing most of them won’t be accepted. So how do I write the offer?

Thanks.

3

Re: Which first - the offer or the financing? - Posted by Ed Garcia

Posted by Ed Garcia on March 01, 2001 at 09:43:47:

New,

I would tell my broker that I want to get pre-qualified to go purchase a rental property. You can tell him that you want to do a 90% NOO loan. If he asks you the price range, give him a ball-park.

Many investors like to have their financing pre-arranged when working a deal. This gives them more confidence when making an offer. It also gives them a better idea how to structure their deal when making their offer.

Ed Garcia

4

Re: Which first - the offer or the financing? - Posted by Eric C

Posted by Eric C on February 28, 2001 at 12:32:36:

Hi -

I guess you could make MANY offers, but I wouldn’t.

Instead, you might want to try to increase your acceptance ratio rather than run yourself to death with multiple offers.

To each his own.

For me, I’m too lazy to write that many offers and deal with that many folks. Better to make more money on fewer deals.

Yours,

Eric C