Real Estate Investing Forums

Real Estate Investing => Financing, Hard Money Lenders, Private Money => Topic started by: Mr. Ocean on August 13, 2006, 06:29:06 pm

Title: business lines of credit?
Post by: Mr. Ocean on August 13, 2006, 06:29:06 pm
First I'd like to say hi, and thanks for reading. I'm a newbie, but eager.

Does anyone know if this is possible... I would like to use business lines of credit with an llc to buy properties cash. (120K-150K). Rent/lease-option (hold) the property for no more than 3 years.

Is this a hml? What kind of rates can I expect with a 680 score? Is this realistic?
Maybe I'm looking in the wrong direction? Please help :iconfused:
Title: Re:business lines of credit?
Post by: JOHNNY Q on August 14, 2006, 01:23:35 am
Regular financing no problem.I do all type of loans commercial and hard money too. No need to go hard money.
Doing two commercial loans right now under llc. Will you personal gurantee the loan.?How much down or any down? Please do the not use the word rent,  please use lease option for legal reason. Please explain your business goal and theory and I will  reply  to see if your plan is feasible.

Sucess is the perfect exection of basic fundamentals!. Lets get you fundamental down first. Let's put the horse first and carriage second.
Title: Re:business lines of credit?
Post by: Mr. Ocean on August 14, 2006, 01:30:54 am
Hey John-

I guess my goal would be to able to pay cash for these homes (one at a time) and Begin the lease option process. Holding the property 2-3 years max. Downpayment? As little as possible.
What kind of rates can I expect. Or LTV? I do have some cash, but would rather not spend it ya know. Any suggestions?

I'm just kinda new to this. Thanks your your patience John. ;D
Title: Re:business lines of credit?
Post by: Lily on August 14, 2006, 09:15:06 pm
!
Title: Re:business lines of credit?
Post by: 4EEM on August 14, 2006, 09:43:00 pm
As a rule of thumb use a rate of 10% for your calculations when looking for 100% financing.  Lower rates are available, but generally you will not see institutional lenders with rates above 10%, otherwise they just turn down your loan application.  No one can give you an accurate quote without a 1003, appraisal/purchase contract, needed income/employment/asset documention, etc.
Title: Re:business lines of credit?
Post by: Mr. Ocean on August 14, 2006, 10:01:42 pm
Thanks Patrick. Lets say I have to personally guarantee the loan ... will that hinder me from future purchases? Basically, does this show up as debt on my personal credit report? ???
Title: Re:business lines of credit?
Post by: 4EEM on August 14, 2006, 10:13:56 pm
Yes the mortgage will show on your credit report the PITI (principal, interest, taxes and insurance) will be factored in as a liability in the future.  The liabilities are offset by income.  Lender will credit 75% of the lease amount as income.  So, lets say the PITI is $750 and the lease is for $1,000, in this case the liability and the income are balanced and your overall DTI will be the same as before you purchased the property.
Title: Re:business lines of credit?
Post by: Mr. Ocean on August 14, 2006, 10:26:05 pm
so as a general rule I should try to add 25% to my costs to keep the DTI ratio the same. I see.  I better find some really good deals to be able to pull this off. Thanks again.
Title: Re:business lines of credit?
Post by: 4EEM on August 14, 2006, 10:37:31 pm
As a rule of thumb your PITI should be no more than 50% of your lease if you are looking for a good ROI as a buy and hold investor.
Title: Re:business lines of credit?
Post by: 4EEM on August 14, 2006, 10:38:15 pm
As a rule of thumb your PITI should be no more than 50% of your lease if you are looking for a good ROI as a buy and hold investor.

The rule of thumb applies to 100% financed projects.
Title: Re:business lines of credit?
Post by: Mr. Ocean on August 14, 2006, 10:43:00 pm
50%? That sound nice but where am i going to find houses that cheap? This seems like a needle in a haystack. Maybe I'm just not being optimistic. I dunno?
Title: Re:business lines of credit?
Post by: 4EEM on August 14, 2006, 10:51:21 pm
50%? That sound nice but where am i going to find houses that cheap? This seems like a needle in a haystack. Maybe I'm just not being optimistic. I dunno?

The same way pawn shop owners get gold. diamonds, etc for $0.10 on the dollar...stupid people and people with problems....that's not a needle in a haystack...throw a rock and you'll hit a few.  Maybe your market is over bought.....look for people that owned their homes before "the boom".
Title: Re:business lines of credit?
Post by: Mr. Ocean on August 14, 2006, 10:58:50 pm
Well I'm going to start doing some rock throwin and see what I can hit! Thanks Pat!
Title: Re:business lines of credit?
Post by: 4EEM on August 14, 2006, 11:04:44 pm
Here is a hint.  Look for people going into foreclosure who have 25-30% equity in the property.  Most of these people cannot get out of the foreclosure in time.  Offer to puchase the property from them at the price they owe and then lease it back to them with the 25% markup on the lease.  Give them an option to purchase the property back from you within the next two years at 90% of market value.
Title: Re:business lines of credit?
Post by: Mr. Ocean on August 14, 2006, 11:06:44 pm
These preforclosures are public notices right? So just go to the recorders office?
Title: Re:business lines of credit?
Post by: 4EEM on August 14, 2006, 11:10:41 pm
Yes.  The notices are published.  You can also buy the infrormation before it is published from the credit agencies.
Title: Re:business lines of credit?
Post by: Mr. Ocean on August 14, 2006, 11:15:16 pm
Do you know the cost? And do I just contact the big 3 and ask them about it?
Title: Re:business lines of credit?
Post by: 4EEM on August 14, 2006, 11:21:37 pm
Experion is the best.  You can get program information on their website.  Costs are about .10-.50 per lead...tend to include phone numbers.  There are min orders...usually 1000 leads.
Title: Re:business lines of credit?
Post by: Mr. Ocean on August 14, 2006, 11:24:01 pm
Ok. Thats a great start. You ROCK !
Title: Re:business lines of credit?
Post by: JOHNNY Q on August 15, 2006, 01:04:36 am
I help investor that are serious and want to learn the steps , show them to maximize thier profit and minimize thier time.Lease option and foreclosure is easy. Please email me tommorow to put a post about how to do this and answer all your guys post as well. Tired. Got to get some sleep. To tired. Too many loans and helping people. Goood night ya'll.-John Q
Title: Re:business lines of credit?
Post by: 48hours on August 15, 2006, 07:12:49 pm
Experion is the best.  You can get program information on their website.  Costs are about .10-.50 per lead...tend to include phone numbers.  There are min orders...usually 1000 leads.

I have been all over the Experian website and dont see the access to leads you mentioned..I see B2B leads but not consumer. Any suggestions? ::)
Title: Re:business lines of credit?
Post by: 4EEM on August 15, 2006, 07:18:20 pm
They are B2B leads.  They are working under the assumption that people who buy these leads are doing so for business purposes.  Just give them a call and tell them what you are looking for and they will give you a bid.
Title: Re:business lines of credit?
Post by: 48hours on August 15, 2006, 07:25:48 pm
Call them and tell them I am looking for personal credit files with mortgage defaults?
Title: Re:business lines of credit?
Post by: 4EEM on August 15, 2006, 07:36:55 pm
So you don't sound creepy...lol.  Ask for "trigger" or "event" leads.  Tell them you want leads that have phone numbers.
Title: Re:business lines of credit?
Post by: 48hours on August 15, 2006, 07:43:41 pm
ok so i am looking for event leads, in a geographic area, for homeowners...is that the best way to approach it?
Title: Re:business lines of credit?
Post by: 4EEM on August 15, 2006, 07:54:08 pm
Yup
Title: Re:business lines of credit?
Post by: ginasands on August 21, 2006, 09:03:10 am
Won't the loans show up under the LLC rather than  personal credit.
Title: Re:business lines of credit?
Post by: 4EEM on August 21, 2006, 09:08:18 am
Not if there is a personal guarantee involved.
Title: Re:business lines of credit?
Post by: John_in_NC on August 21, 2006, 11:31:44 am
Very interesting.......But....Most mortgage companies don't report the lates, just the FCL. I don't know why though. But if you are trying to get a new mortgage, I know they will call the previous lender and get a very detailed report.

Maybe you could work that out.

How have your results been using this method? I would think without a notice of default yet most of these folks would still be in denial.
Title: Re:business lines of credit?
Post by: 4EEM on August 21, 2006, 01:41:16 pm
Ohhh...we are are on different wave legnths.  I'm talking about lates on residential mortgages not business lines of credit.
Title: Re:business lines of credit?
Post by: n604 on August 26, 2006, 04:29:01 pm
Won't the loans show up under the LLC rather than  personal credit.


check this out:
http://creditboards.com/forums/index.php?showtopic=152236&hl=report+on+personal