looking into purchasing foreclosure in another state - it’s 2% down requirement, with 30 day close.
other than hardmoney, what’s best options for financing?
additionally - many of the banks require pre-approval for loans. as member of LLC - if i personally guarantee the loan, how will this effect my personal cred history (i do not want it to show on MY personal hist, as i’m trying to purchase a personal home with my wife - i don’t want another 40k of borrowed funds on it) - so lender must lend strictly to LLC (with my guarantee).
That will probably be just about impossible. Your LLC is only 6months old, probably has no credit and you need 2yrs for established credit. Its hard enough for a personal mortgage w/o 2yrs credit history.
Now an LLC means your not responsible, so if your guarenting the loan, if will show on your credit. If the home has enough equity, look for a HML, and then maybe someone that can refi it into the LLC…But before doing that, I make calls to see who can do it, and have them procide proof like references.
I have had luck with private money investors, although they require equally high ROI as a HML.
The plus side is the LLC factor for private money investors. Check with your local Securites Commission and the SEC for more information regarding private money investors, and requirements.
we’re going to focus our efforts on relatives and friends and we’ll be asking for basically gifts of 2500 per person we ask. i realize the potential for problems here - but i believe that if people are willing to help us get off the ground - in the future, such gracious gifting from people we know, will pay off dividends in the future for them.
so far we have two people willing to gift us 2500 each. additionally, even if the 2500 is a no interest loan - that’s fine as well. i believe we can get up to 6 more people and an additional 3000 from a relative for a emergency cash fund - if rehab efforts exceed 5000.
my partner and i have funded the business and have actually closed on one property thus far - cash.
i do not want to become involved in mortgages if we don’t have to.
and if we do, these deals are small (less than 55,000), so the loan amount may even be less than 15,000 - which, in this case, i can use our CC, pay the higher interest rate if need be - paying the minimum and, if need be, refinance in the future to pay off CC.
the way the market is currently and the growth of the area - by my speculations - i can’t see us holding the property more than 3 months - 6 months tops. hopefully… ;D
now, question - if we want to refinance, from experience, will banks more readily provide a low LTV - say 40% - to title holder - LLC, once the project is improved? without personal guarantee? ;D (i’m sure i know the answer to this).