I’m looking for a good lender or broker that works with Investors. As I talk to more and more of them, they all or most want to check my credit. What should I do? Should I let them? Will this affect my score?
I’m trying to spot a lender that will call me back when I need any info or when I call there answering.
Lenders are going to need to pull your credit. Otherwise anything they tell you is a guess at best. If you “shop lenders” and allow them to all pull your credit you run the risk of having your credit drop to a point where you cannot make a purchase.
If you post up on one of these sites that you need a lender your going to recieve a lot of soliciations. Some lenders are good some are probably not so good.
There is really no way, without speaking to previous clients, to know if a lender is going to promtly return you calls.
I am looking for a lender who will provide 100% financing for a real
estate construction investment over a period of 1 year. I am running into a brick wall with banks for the reason that I have no money for a down payment, collateral, and no job so I can not prove that I have income. I do real estate investing full time. We have done 3 new constructions and 4 rehabs over the past 4 months. I have great credit and would like to talk to someone about my options. I would be willing to pay a lender 6 to 8% of the loan amount.
I have located 6 acres that I am planning to build 10 to 12 houses on within the next month. I need 50 to 75K to get started. Again, I do not have money for a down payment or closing costs. We can build a home in 7 weeks and they generally sell within 1 to 3 months.
Empyre General Contractors Incorporated
Finding the right mortgage consultant for your investments will be important for the growth of your business. Once you have found a professional whom you feel comfortable with he will need to pull credit to review over scores and tradelines. There may be a few short forms to complete as well so that he can intelligently discuss loan options with you. A credit check should not be needed again until another property is ready to be financed. (As a side note, when your credit is pulled by a mortgage broker or auto lender, the bureaus treat up to 15 hits within a 30 day period as one.) The consultant should be asking questions about your short and long term goals so that the appropriate mortgage terms can be matched to the subject property.
There are many lenders a broker can use and most of them offer the same programs. A handful will even allow 100% financing for 1-4 units. However the guidelines may be slightly different at each. Some of the key points lenders will consider are listed below.
How many properties are currently financed?
How many properties have been purchased in the past 6 months; in the past 24 months?
Does the borrower have landlord experience?
Will the subject property have a negative cash flow?
If the borrower doesn’t show enough income he may need to go stated, no ratio, or no doc
Usually a borrower will need 6 months of reserves. (6 months of principal/interest/taxes/insurance) If multiple properties are being financed, reserves for all may be required. This could also apply for properties purchased in the past 6 months. If funds are not available the borrower may need to go stated or no doc.
The variation of these is why long term goals need to be addressed. Certain lenders will need to be used first as their property restrictions will prevent financing. The lenders that allow unlimited properties usually have higher rates and should be used as the portoflio grows. In some cases, as the equity increases, investors will use a local bank to obtain a blanket refinance loan in the name of an LLC.
Speaking of an LLC, it will be important for you to be teamed up with other professionals who can give tax advice and estate planning advice. Your mortgage consultant can work hand and hand with them as well.
A great mortgage consultant should also be able to provide answers on how to qualify for 100% rehab financing. They should also be able to explain how lenders can approve 90% cash out refinances with no seasoning of title. This will be valuable if you complete a rehab or have purchased a property well below market value.
So far this only address the knowledge your consultant must have. Dont forget about service. This includes communication with you and the real estate agents involved. Every transaction goes through the same process. Within this process there are some key events which can be updated to everyone. Part of service also includes helping you manage the terms on your portfolio. A professional should be aware of how mortgage backed securities affects interest rates and have an opinion on what direction the market is heading. As your consultant he can notify you periodically of new loan products or lower rates.
I hope this has helped give you an idea of the service that real estate investors are entitled to. Good luck in your search for the right individual.
Thank you for the information. I will take what you have said into consideration. We are currently working with an investor who splits the profits with us. He fronts the money for the construction, we put the property in a land trust, he even pays the electric and water until it sells. After it sells we give him 50 % of the profit. Since we have a bunch under our belt we are looking for someone who will go 8 to 10%. We have located 6 acres of land in which we are going to start construction of 10 to 12 homes. If anyone would like to lend in this venture please contact me immediately. New constructions sell quickly. 109 Redwing was on the market 2 weeks and we already have a contract on it. We will do one house with you and if the relationship works we will go ahead and do the rest with you. Contact me if you are interested. 903-767-6049. My credit is in the 700’s but I don’t have a job b/c I do this full time.
You can view pictures of 109 Redwing and 809 Evergreen on our website: www.empyre.us . There is a virtual tour of 109 Redwing and a slideshow of 809 Evergreen. The rehabs are on the link: rehabs.