Prequalification

General Real Estate Investing
1

I talked with a broker today regarding apartments and he said I need to get prequalified with proof of funds before he can represent me as a buyer’s broker. It seems to make sense, but anytime I look on a website for a loan they always want to know what property I want to buy. It’s like the chicken the or egg- which do I do first- get proof of funds or find the property.

I also am having trouble getting property setup sheets and expense reports from listing agents, that is why I want a buyer’s broker to represent me. That way he can do a lot of the work for me and help me in locating other deals.

2

A word that I have been seeing a lot of on this site and some others is cross-collaterization. Perhaps you could pledge some equity in other properties that you have to cover the other 20%.

3

I wish I could but I don’t have any other props or a house.

4

There are lenders that will issue you a pre-qual based on your income & credit without having a property.

Do the listing agents give you any kind of income or expenses on the property? You could issue a LOI at full asking price but it must be contingent on delivering all due diligence documents. I would then give myself ample time to verify & perform due diligence after the receipt of the last document (30 days).

Patti Porter

5

Pre-qualification??? Any broker can whip up a letter in a few min.

6

Patti, you said there are lenders who will give you a prequal without seeing the property? Who are these lenders?

7

Patrick, you said a broker can get you a prequal letter- do you mean the mortgage broker or commercial property broker? My property broker needs to see a prequal from my lender before he will show me any props.

8

Any mortgage broker can.

9

Now if I told you who the lenders were, I wouldn’t be in business for very long. :slight_smile:

Patti Porter

10

Dynomac,

I have seen many of your posts on here. Why are you starting out with commercial properties? You know you cannot get 100% financing on commercial property.

Hve you had a strong employment history over the last 2 years? Do you know how much you qualify for? Do you have a solid credit score?

100% is easy on residential , as for commercial the highest combined CLTV I have ever seen was 90%.

11

with a 680+ 90% LTV is easy…95% CLTV is available if the seller is willing to carry 20%.

With an application and a credit report a broker can provide you with a conditional pre-approval is as little as 24 Hours.

12

What is CLTV?

13

Combined Loan To Value. Add the Loan To Value of the first and the Loan To Value of the second and that will give you the Combined Loan To Value.

14

Dynomac did you miss my reply?

15

I agree with MoneyLender. You need to start out in residential if you don’t even know basic terms. Commercial doesn’t have the same consumer protection laws that residential has. Having the law broken isn’t uncommon and the person with the most expensive lawyer is the one who will win.

Not trying to discourage, but you’re setting yourself up to get taken if you have no idea what you’re doing.