Alex,
thats why I contend that those that have bought property with short term Vendor financing say 3 to 5 years.. and where told as soon as things get better they can refi… This is just not the case and is ABSOLUTLY FALSE… These 50k and sub loans have never been easy to get Unless they are owner occ. Or maybe second homes… NOT investment properties and certainly not Foriegners.
So my advice to those that have bought property this way is to either start paying your mortgage off now with higher payments I am sure they do not have pre pay penalties… and or be prepared to pay the balloon in cash..
DO NOT BUY A VENDOR FINANCE on the hopes and representations from any marketing RE salesmen etc that is telling you that lending will get better in a few years just not the case
JLH
jayhinrichs wrote:Alex, thats why I contend that those that have bought property with short term Vendor financing say 3 to 5 years.. and where told as soon as things get better they can refi… This is just not the case and is ABSOLUTLY FALSE… These 50k and sub loans have never been easy to get Unless they are owner occ. Or maybe second homes… NOT investment properties and certainly not Foriegners. So my advice to those that have bought property this way is to either start paying your mortgage off now with higher payments I am sure they do not have pre pay penalties… and or be prepared to pay the balloon in cash.. DO NOT BUY A VENDOR FINANCE on the hopes and representations from any marketing RE salesmen etc that is telling you that lending will get better in a few years just not the case JLHPeak is about only company offering the lending short term. So it is a two way street for one who does not have the capital not a bad way.Expensive money but for us in the USA who used hard money it a road we traveled before.
We looked at our deals in Charlotte as taking 7 to 8 years to be paid off so best to over pay on loans or be ready to refi.Spoke with a lender last night.They said a company like peak who is planning on doing 300 to 500 loans in next 3 to 5 years . With that amount of business a major company would come in and work with them. Other wise single buyers are going to be heading for a major headache unless plans now. Make sure to get everything in writing , like if they say loan can be extended with out fee's in case of not being able to refi.
So guess it always going to come down to do you have the capital to play or not to play in real estate.
My comments are for our Foriegn friends… US citizens maybe able to find a home somewhere.
Off shore no way.. just way too much risk in those as well as no real money made on the origination of the loan..
JLH
Two points regarding questions above.
Firstly, Yes you can open a US Bank Account in days, without having to travel to the US, or without using third parties, I am doing it quite easily for my clients, you need an LLC or other form of business identity, plus the normal US Street Address and Phone Number, all of which can be supplied, again, I have clients opening Bank Accounts very easily and quickly.
Secondly, US Finance, I am successfully getting US Finance at 8.25% at 50% Lend with fairly low fees etc, <moderator: delete advertising>
Jeff L.
The best way is to use whats called a Master LLC setup by an attorney. Which then has an operating agreement with all properties through a management LLC. This means each asset is protected but you dont have to set up anew LLC for each home. Cost is about $2500 so its worth it if your going to buy more than say 3 homes. <moderator: delete advertising>
Mark
I realise this is a bit of a late response to the original question but thought that I'd let you know that I know of an Australian couple who have just managed to get financing for a recent property purchase.
They originally spent about $1 million in property last year and now the banks are willing to lend to them as their loan is secured against their USA assets. From what I gather, you can start having US finance (as an Aussie investor) once you have substantial amount of asset to secure against.
They have just borrowed ~ 70% for a 90 unit deal.
Frankly you can buy commercial property through commercial bank lenders and not pay 9% but around 5% or less. The problem with hard money loans at 9% plus no doubt fees what does that leave you for net cash flow the answer I am sure is not much
Nigel Kibel | Property Know How
http://propertyknowhow.com.au
Email Me | Phone MeWe have just launched a new website join our membership today
Sorry as a SMSF specialist i would question whether buying in the US and borrowing funds at 9% thru your Super Fund could be seen as a sound investment decision.
You would be better of to do a related party loan at 1-2% and personally claim the Tax loss in your own name.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Are these SMSF compliant loans Nigel?
$40k property US purchase
$20k Finance @ 9% = $1800 p/a
12 month average returns let say even 7% = $2800 p/a
All done with $20k equity from Super, to fund a long term investment at the rock bottom of a recession cycle.
Average Income $60k P/a = 9% employer contributions
$5400 p/a employer contributions p/a would more than cover finance holding costs.
RE fees, charges etc, like they say buyer beware, like any offer its up to you to negotiate and evaluate the offer.
Have referred many people in last 6 months, some very sophisicated investors, all seem fairly happy to me.
Consult your advisor is my advice and be open to opportunities, property profits are made by savvy investors not sheep
Nigel if the 5% commercial loans are compliant, would be very interested, into looking into these more, if we can find a better offer , fantastic, where would be the best place to start find these?
Thanks, will research the related party loan feedback
You must be logged in to reply to this topic. If you don't have an account, you can register here.
