I need a loan desperately. Conventional lendors hate me I think. I have 1 week to close on this property in Ohio. It is a 4-unit rental. The purchase price is 32.9k. It needs fully rehabed to the tune of about 20k. It it worth 80K ARV. I need any kind of loan possible. 80-90% LTV, rehab, 80/20, OO, NOO, 15% interest. I dont care, i just want this place. My annual income is 26k, mid FICO is 720, and can do full doc. (military)
I am desperate at this point and will lose my earnest money in 1 week because I have been lied to by GMAC for almost a month.
The first thing that I would do is to ask for an extension from your seller to buy more time. One of the problems that your probably having from the conventional lender is the fact the amount is so low, under $50K. Most lenders don’t like that small amount of a loan. If you can get the purchase done and get the rehab completed you may be able to find a more favorable lender.
I have had a similiar experience with a mortgage broker that was similiar to yours and it’s very frustrating.
You will have to push the After Repair Value appraised value to a reasonable level because you will have to maintain a 65% LTV ratio with a HML… Right now with the purchase of $32.9 + 20K in rehab you are a little over the 65%. Cut your rehab budget a little bit.
I have worked with Rick from 4Rmanagement.com and he has helped me in though situations. Tell him North Dakota Investor. NDI sent you.
Most sellers are OK with a slight delay.
I agree that more time would be needed. Cutting your rehab budget may not be necessary though.
There are hard money lenders that will go to 70% arv and will also allow the seller to hold a 2nd. This means that even if 70% is short by $10-15K (for example), your seller can hold the balance. Since it’s short term, they’ll probably go for it. If your buying from a bank then it might not work. But you’d still have 70%.
In the loan mentioned above, the lender likes to roll in the monthly payments, something that most lenders will not do. I dont think the loan in the other reply will do this either.
Your numbers look ok.
Thanks for trying to help guys but my contract expires on Mar. 24 and since this is a bank owned property they said will only extend the contract at a charge of $150 per day. I am not willing to pay the fee so I will lose my deposit of $500 on the 24th. All this is because I had a couple lendors say I was approved for a loan the then 3 weeks later tell me they cant do the loan. The reason the lendor backed out is because they said the amount of repairs needed for the property did not qualify me for conventional loan. I told them the whole time the place needed rehabbed. I have also been turned down by a HML because this is my first rehab which wasted even more time. This property was originally listed at 60K and I have talked them down to 30K. The real estate agent said this place would be worth 80-90K when fixed up and the apartments would rent at $350/each for the 4 units. I really messed this one up huh.
Thanks for your help,
Do you have title and an appraisal (arv) completed?
There is a chance this can be done as a rush with some lenders.
They were done by GMAC but they never gave me copies of that stuff. I also had a termite inspection done also. I could try to request them but I am not on good terms with them after my chat with the brokers boss. I just dont like when this brokers say “Oh, this is such and easy loan” just to get you to do business with them, and then every week have a new excuse like “Im still waiting for the loan to come back from the underwriters”. Or send me a forms with the wrong property address on it. Why can they even look at the thing before they give it to me?
Oh well lesson learned.
Do you know the name of the appraiser or title company? You may be able to go around getting the documents from GMAC. GMAC is actually one of the best lenders for residential financing. However, you’ll always have some employees or offices that may not perform well. Since they are a larger corporation then you may be able to go over the “boss” there. I’d start again with them and be cordial. If they dont agree to helping you then I’d take down the name and contact # of their superior. The corporate office may need to step in. You’ll have to work at that tomorrow if you thinks it’s worth it.
Wow, only $32.9k for the house? What’s the credit limit on your credit cards? Do you think you can charge the whole thing? Probably not because even if you have a credit limit of 20k, I think they only let you take out 10k as a cash advance, but if you had enough cards you could do it. It would hurt your FICO score though in the short term as having more than 30% of available credit in use lowers your score. This would be tough if you’re looking for money afterwards to repair the place.
Anyway, as said earlier, if you had the appraisal in hand, it’s possible to close in a week, however because of the small loan amount, there aren’t that many banks that do stuff for under 50k. If you had a good relationship with a local bank, they may be able to do it in house. Sounds like it would have been a pretty good deal, hopefully you can still pull it out.
You might try Martin Pool at New Vision Investments 801-782-0800 email@example.com. He specializes in short term situations like you are in. His website is www.new1vision.com. If your numbers work, he can help you. Good luck.
you might want to look into unsecured line of credit. Can close within a week.