Terms to good to be true?

General Real Estate Investing
1

Have been offered 80% refinance loan from a commercial lender, Main Street Mortgage/Armstrong in Norcross, Georgia.

The offer came from a phone solicitation, then a written “loan approval” letter. They offer refinance with cash-out at 5.75%, 1 % closing costs, 10/30 year or 20 year term.

This seems too good to be true on non-owner occupied 5 unit parcel.

Anyone done business with them?
Terms too good to be true?

2

Can you say “Bait and Switch”?

Mike

3

Mike,
Dang. You could just be right.

I looked them up on Google and there are many Main Street Mortgage Companies but I couldn’t find one with that exact street address in Norcross, Georgia.

They seem to be in a big hurry. Send your tax return, $130 processing fee check, and bank statements right away!

I don’t want to send ANY of that to an unknown entity. I found a Realtor listed in Norcross and thought maybe she could tell me if it is a legitimate office or a drop site.

Help, you readers! Are there any scams going to get personal financial info. via these solicitations?

Doesn’t the 5.75% fixed on non-owner occupied units sound too good to be true?

I could almost taste that money…

FurnishedOwner

4

Run…run as fast as you can. Most people will be lucky getting the 5.75% Cash-out on an owner occupied unit. Multi-units always carry higher rates than conforming loans and are really tight on the percentage of cash-out one can obtain.

Find someone who has experience (specializes in) with investment property loans as they are a specialty area and those that do not have experience with them can really mess things up.

5

I wasn’t thinking about it being a phishing scam, but anything is possible on the internet. More likely, it is just a mortgage broker that is trying to lure you in with an impossible rate and then switch you to the real (much higher) rate later. I don’t think you’re going to get much below 7% on a multi-unit NOO rental property. I would strongly suggest looking for money in your own back yard from a small local bank you can trust.

Good Luck,

Mike

6

mdhaas and propertymanager:

Thank you for your valuable input. My small local bqnk would lend at NY prime plus 2 points I believe. I’ve currently got a Countrywide 7.375% fixed plus PMI. I bought it as a residence plus guest cottage plus garage but it will be residence plus 4 units when major from ground up rehab is done. Those "lil shacks were units.

I will continue to research this lender, I want to hear his line. Don’t like to get scammed, just want to get rid of $100/mo. PMI ASAP.

I just thought there may be special “hotel” money out there, better priced than units money.

FurnishedOwner

7

I found out Main Street Mortgage would only lend on commercially zoned property, nothing else.

Furnishedowner

8

I just got a loan from my broker at 6.25% NOO cash out refi with no points 80% LTV no title seasoning.
Jay

9

J,
Was that fixed? Where is your broker located? Points?

Thanks,
FurnishedOwner

10

Furnished
It was for 200k no points 30yr fixed and the loan was a chase bank loan. The broker is located in the San Fransisco bay area.
Jay