I have been buying property for over 12 years in Missouri. With all of the craziness going on right now and the prices being so low I have been trying to find a way to maximize my portfolio. Recently, I found a lender located in Kansas City that is offering an 8.25% rate. The firm requires a 50% down payment and charge $2500 for the fee. The term is set up on a 3 year arm with a 30 year amortization. The term can be lengthened if the loan is in good standing in 12 month increments up to five years. The firm is also rolling out a 5 year term some time in the first quarter of next year. I would like to hear some thoughts on investors who have already used financing to see how competitive this loan is.
MJ
Seems like very similar program we are using but rate is 7.85 and 3500 charge for the funds, and term was 3 year balloon.If in good standing will lengthen but no guarantee( just there word so far on that ) We are waiting to see the fund for the 5 year term…
Alex
beware the balloon payments have a clear exit before entering,
Alex and I both went through some troubling time when refi's did not happen.
You will have lenders in the states that will "Loan to OWN" another words they hope you can't pay them off they then foreclose and your wiped out.
I was at a meeting to day IN SF and the Chineese agent was all but saying thats what they do. They hope to get the property back.
on the other hand I as a lender just want to be paid off I would never make a loan to own transaction
Yes Jay a 3 year balloon is risky even for a USA investor. I am thinking it has to be 5 years with a guarantee that the client can roll for another 2 to 3 years.With out incurring ridiculous fee's .
Alex
whats needed is a fully amortized product, Where 100% of the cash flow pays off the property, then the borrower has a free and clear property with no balloon payment. They do not get cash flow up front and may be negative but pay of the property very quickly. This is what most US investors do
When we met that what a investor in Orlando is doing. His cash flow is very low but he plans on paying off the homes in 5 to 7 years. Now then again there is the risk if vacancies. There are for sure going to be repairs . I am sure if this is taken into consideration.
vacancy
repair
taxes insuranceIf those factors are taken into consideration might not be such a bad product…
Alex
PS you never hit me back about my Atlanta home . For $28k I could not go wrong on that one…. Don't want to sell but keep for long term rental.
Hi guys I am aware of a lender in Texas that is doing 80% lends for new construction even for “Foreign Aliens”. This is available for selected properties in the Banks local area.
PM me for details as I seem to get censored for advertising….
The group in the USA we were using for International investors. I don't think they have the funds to keep things going.
For some one to come in and fund these types of deals , will have to be a heavy hitter or hedge fund. Being there are several markets in the USA that investors are scooping up properties .just my two cents..
Will update when I get some better information
Alex
Probably the banks selling their own inventory would be my guess.
and a smart move for the banks in my mind the Aussie investor with 20% or more down is a better credit risk than a nothing down US owner occ. Dual sources of repayment… One rent two investor.
jayhinrichs wrote:Probably the banks selling their own inventory would be my guess.and a smart move for the banks in my mind the Aussie investor with 20% or more down is a better credit risk than a nothing down US owner occ. Dual sources of repayment… One rent two investor.
Jay we been talking with Danny and his group.Looking at less fee's and some type of 3 to 5 year loan. Since the investor is putting 50% down.Just finding the back end lending is the tricky part .I now see why you said it would take a larger fund. Then what I had in mind.The group I discussed with you was talking $2m .Which would do nothing and be gone in one month.
Hoping to have an answers in next few days from them
Talk soon
Alex
PS you should have an email from me Yes bid $12k on that property I sent you..Alex SC wrote:jayhinrichs wrote:Probably the banks selling their own inventory would be my guess.and a smart move for the banks in my mind the Aussie investor with 20% or more down is a better credit risk than a nothing down US owner occ. Dual sources of repayment… One rent two investor.
Jay we been talking with Danny and his group.Looking at less fee's and some type of 3 to 5 year loan. Since the investor is putting 50% down.Just finding the back end lending is the tricky part .I now see why you said it would take a larger fund. Then what I had in mind.The group I discussed with you was talking $2m .Which would do nothing and be gone in one month.
Hoping to have an answers in next few days from them
Talk soon
Alex
PS you should have an email from me Yes bid $12k on that property I sent you..when your speaking of longer term financing for these properties you locking it up 5 to 10 years. And I really hesitate for any loan that has a balloon payment. As there still is no clear exit from those other than the borrower coming up with cash.. And some investors you know will not extend and will go after the property they may say they will look at extending but when that day comes who knows.
It would be great to have a fully amortized 10 or 15 year product. However I was running the numbers with some Aussie wholesaler guys and when you do that the return cash on cash is only 5% or so until the debt is paid off. And of course that gives Aussies a stop right there because they know to be compettive they have to quote 12 to 20% to run with the pack..
Where US investors would be thrilled with owning a rental in 10 years or so free in clear even if it did not make any cash flow or cost them a little a month. Different perspective that.
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