What Every Investor Needs to Know about Loans for Rental Property 

If a conventional loan is not a bank or CU loan then what is the definition of conventional loan?

@@BorderGuards Conventional means that the loan is sold to Fannie/Freddie on the secondary mortgage market. A local bank / credit union loan is one that a local bank or credit union originates and holds the paper and services it, rather than selling on the secondary mortgage market.

What do you think about a HELOC?

@@mchet9699 I love them, so long as you are using them for short term capital needs.

@@freedom_mentor Long time ago, I tried to get a loan against a investment property and was turned down because I did not have the income then to buy the properties. Now the homes have gone up 800% since the 1990s :(

Agree and it is an eye opener. Most of the people on here are full of it or not as savy as this man. He's a blessing!!!

Great job man I’am happy for you keep up the good work

This is motivating. I’m 22, decent credit but I don’t have proof of income so I just don’t know how to get started

Where are you today in your journey? New truck yet? 🤞

@@Sakrific3r Nope still have the same truck (Chevy Silverado 2001). Only this time now I just recently bought my first apartment complex this past December (17 units). Once our remodel is complete, we expect it to bring in roughly $6000/mon NET after all expenses paid. After the remodel I am considering finally buying a new truck just for the tax deductions I can get with the new "bonus depreciation" IRS tax law. Not to mention my net worth will for sure be over the $1mil mark once the remodel is complete. (currently at $955K before the remodel) But we will see what happens, I kind of like having stealth wealth. Its just a Vibe knowing you are the richest person in the room and nobody would ever guess.

@@simonmartinez8480 that is so awesome!!! Following you on following the dream. Thank you for the inspiration. Kevin

Just watching this video now and saw your comment. Out of curiosity what is the appraisal process like? Do you hire a local person to view the property or do you simply look online for the value? Trying to educate myself some since I am in the market for a refi using dscr.

@@BrianWingard oof just seeing your comment now, my bad! We order a local appraisal and an appraiser gets rental comps and defines an expected rental income. Some of my lenders will allow you to use Airbnb income history or AirDNA numbers if the property was already being used as a short term rental. Depends on the scenario but typically the appraisal is done in person.

Do you lend in Illinois for rental property?

@@happycamper4483 I do indeed 👍🏼

Quick question, What are the credit requirements?

What is the typical rates for 800 credit scores?

Do you do cash-out refinance or a HELOC for a rental property (Paid off) that is under a LLC? I own multiple properties, most with mortages. For this cash-out refinance, the property is paid off. Would the multiple mortgages in my portfolio affect my chance?

This mortgage company is Closed.

Love Sean videos!

Crowdfunding initially had huge momentum but then it suffered some major setbacks due to piss poor underwriting departments that didn't know what they were doing and bought the wrong properties at the wrong prices and with the wrong management. Whether the source of the funds is 1,000 people putting in $5,000 or an investment fund or private bank putting in $5MM; the underwriting is the key. There has always been more money for real estate than good deals. Sourcing money from the crowd was never needed to begin with; we already have all the money we will ever need for real estate. What's missing are good deals that are purchased and operated by smart investors.

Great! Glad you found that the clarity that you needed. Let us know if you have any other additional questions.

I have never seen this actually happen to anyone, ever. If the LLC is 100% owned by the very same person, in my experiences over the past 20 years, no lender has ever enacted their rights under the security instrument to call the loan due.

Great to hear! Any other videos you'd like to see?

I will be brief with what I do. I'm a financier building my profession around business professionals like you with hopes of synergy for the growth of each other's business. Should you be looking for finances to sustain your business/personal interest, kindly look into 52G Finance LLC. We specialize in personal loans, business loans, project finance e.t.c with a very competitive/low rate to local and international borrowers(Your location is within our jurisdiction). Our terms includes great features to help stabilize your business before repayment. I can send more information if interested. The rate are welcoming I assure you.

Thank you! What was most helpful about the video for you?

good idea

add Tom Wheelwright too

I agree.

Mos def

Let's be honest, they aren't in the same ball park. McElroy's AUM and industry reputation dwarfs this guy's.

I will be brief with what I do. I'm a financier building my profession around business professionals like you with hopes of synergy for the growth of each other's business. Should you be looking for finances to sustain your business/personal interest, kindly look into 52G Finance LLC. We specialize in personal loans, business loans, project finance e.t.c with a very competitive/low rate to local and international borrowers(Your location is within our jurisdiction). Our terms includes great features to help stabilize your business before repayment. I can send more information if interested. The rate are welcoming I assure you.

@@larrycox697 what is your email address? I am in Canada.

Looks like a mortgage broker that may originate Non-QM loans; they don't appear to be a Portfolio Lender.

0 down with them on primary residence loans too. No minimum time of residency before you can move out and rent it out

Nice!

I will be brief with what I do. I'm a financier building my profession around business professionals like you with hopes of synergy for the growth of each other's business. Should you be looking for finances to sustain your business/personal interest, kindly look into 52G Finance LLC. We specialize in personal loans, business loans, project finance e.t.c with a very competitive/low rate to local and international borrowers(Your location is within our jurisdiction). Our terms includes great features to help stabilize your business before repayment. I can send more information if interested. The rate are welcoming I assure you.

You're very welcome. Are you investing in real estate right now?

Isn’t that wild? First time in my 20 years in real estate that investor loans based on the performance of the property can have better terms than conventional loans based on the credit worthiness of the borrower.

Thank you!

Amen! Thank you.

Thank you! Have you had a chance to watch any others of ours?

Thanks Ted!

Thanks!

How large is your down payment? How well does the rental property cash flow? What portfolio lender are you contacting?

You're welcome!

Great! Glad it was helpful and informative.

You're welcome!

I cannot. I am not aware of Portfolio Lenders specifically for manufactured homes.

Thanks!

Glad to hear!

It has it's place, at specific times and in specific markets, for generating leads. It's far inferior to other techniques; but it's not completely useless. Although, our inside joke amongst our Apprentices is that anytime another investor asks, "How did you find that deal?", we reply, "Direct mail; lots and lots of direct mail."

(1) If you make your 3 unit your primary residence, when you move in, refinance into an owner occupied conventional loan to get a lower interest rate (and a lower down payment). (2) The short term vacation rental question is more complex. You may NOT be grandfathered in. I wasn't on 5 of my vacation rentals in Daytona Beach. I could have sued the City, and perhaps after 4 years of litigation, I may have won. But I could have lost too. So I didn't take them to court. The Achilles Heel of short term vacation rental investing is if you are doing it in an area that legislators in that region are trying to ban in.

@@freedom_mentor thank you for the information Phil. My wife and I bought a house with 2 separate ohanas on the property. It was not our intention, but, as it turned out, we needed to finance as an investment property because the state of Hawaii required this because of the fact that our primary residence is not on island. As it has turned out, we have a great property manager whom found us great long term Tenent’s to rent and live in the house for the few years before we move. Someday we wish to cater to tourists whom visit the area, but we have come to find, that Hawaii’s local government is in bed with the large hotels that will oat likely present another problem for us to find a way around in the future..🌈😃🤙

Use IPX1031.com They are by far the least expensive intermediary (and the largest, so they have the most experience).

@@freedom_mentor thank you Phil. My CPA was just telling me that I’ll need an intermediary. Awesome timing. I suppose it doesn’t matter where in the US these guys are located.

They are in every state. They are the largest in America.

@@freedom_mentor yup. I found them in Texas and emailed him. Appreciate your help 👍👍👍

It sounds like you have a tremendous amount of potential capital to deploy into real estate; whether you did at 5 Year ARM or a 30 year fixed rate, you could pull out a substantial amount of capital from your primary residence to use as a down payment on an income producing property that had a 70% LTV first mortgage. So you could theoretically purchase a $2M+ property (or several properties that add up to that amount). Money isn’t your problem. I would guess the bigger issue is finding highly productive income producing properties to purchase as explained in this video: ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-64tQTTf-unI.html

@@freedom_mentor Thanks for the quick response Phil! I hadn't thought about using the equity as a down payment vs buying a 2nd home outright. Even more investment potential. :-)

Not that I am aware of. Construction loans are higher risks for lenders because they know, all too well, how difficult, complicated and risky developing a new house is; all the delays, unexpected problems, etc. I would NOT recommend building new. Buy existing and remodel.

@@freedom_mentor I’m building new but having guest houses attached to Airbnb here in New Orleans you can really remodel because a lot of properties are historic and can’t be change … city regulations

look into tax harvesting for losses

Have you contacted any Portfolio lenders?

@@freedom_mentor thank you Phil

No. The only way to remain anonymous is to pay cash and take title in an LLC whereby the member of that LLC is an offshore Trust.

I own several properties that were built before 1945. They don't make them now like they used to! I love older properties. Asbestos siding is awesome. It's much better than wood or vinyl siding. As for lead based paint, since you just paint over everything, unless you test, you never really know if it was lead

The equity in your home could potentially be accessed using a HELOC but that will be predicated on your debt-to-income ratio. Your ability to obtain a loan on a rental property could be determined by the performance of the property itself, and not your personal financial situation.