newbie needs financing help

Financing, Hard Money Lenders, Private Money
1

I need some long term planning help. I recently became a loan officer so I could have access to fund my own investment properties. However, I’m really new to investment financing and need help. I was planning to do a cash-out refi. on my primary res. which should get me about $20,000. I want to use that to purchase investment properties (for owner finance). I could probably do 2 or 3 low end properties with that $20,000, but then I’m stuck. One I won’t have much cash left for additional funding for more properties and once I’m up to 4 I won’t be able to get traditional funding.

I read somewhere if I do a cash-out refi. on my primary I can’t use it for investments? is that correct?

Also, with $20,000 on hand, what is my best option to purchase? I’d like to purchase 3 new properties each year and build a decent cash flow. Also, how can I get around the due on sale clause with traditioanl funding?

Thanks for any input. I’m ready to get started, just want to make sure my first step puts me in line to meet my long term goals.

Thanks!

2

No, there is no reason you can’t use cash out from a refinance to buy investment properties. I’m not sure why you say you can’t use traditional financing after you own 4. I think that depends on the lenders you use.

As far as a due on sale clause, I’m not sure how that comes into play. Maybe if you’re taking over properties subject-2 but not if you are buying with traditional funding.

3

You also will find that a lot of lenders do NOT like to lend to people in the profession. At the very least, it is likely the will NOT allow you to originate the loan. (And remember, RESPA prohibits the payment of referral fees, so please be careful that you don’t have a buddy originate the loan and pay you for the pleasure.)

Take care,
Steve