I started a business about 6 - 7 years ago and bought owner financed notes. I also bought small properties and resold them with owner financing. I used a mortgage co. on a couple of deals, private financing on a couple and probably did 15 or so deals with the bank. The bank would usually loan me up to 85% of the purchase amount on a purchase of RE or a note. But because I was buying discounted deals, they were never really in the deal more than 50% to 65% LTV. I did these on short term commercial loans (3 to 5 years) this was at there base rate plus 1%. The range of interest rates that I paid over those years was 9 1/2% to 10 1/2%. I consolidated my equity position in several properties and got an 8.5% credit line on all of my equity under 75%LTV. The closing costs were usually minimul, it was a case by case - sometimes I got appraisels, but not always. Sometimes I provided them with a lenders title policy, but not always. It was a case by case.
They are an independent bank and do in-house deals for investments within a certain radius of their bank. They will reach out a little further than Waco for significant customers. Worth a try - just have to take them a sanitary proposal, if it makes sense and they have confidence in your capacity and ability, they will work with you very flexibly. They are fairly conservative in their evaluations, but if you get them involved at a low LTV, its a no brainer.
Re: Cashout and then sell owner finance in Texas? - Posted by Ken Jacoby
Posted by Ken Jacoby on June 15, 2002 at 24:37:49:
Talk to some of the local lenders. You may be able to get a line of credit, secured by the property. I have one independent bank that did that for me in Waco, TX for 8.5%, 75% LTV and it only costs me $400 for closing costs - min. amount of documentation.
I have done a business line of credit in Alaska with Wells Fargo - I secured them with a deed of trust on the property that I bought with cash as FC. I got the money at 6.75% variable rate - they said I would have to pay 1% of the loan amount as a fee and so far they have not charged me anything other than I paid to record the Deed of Trust and carried it to them with proof that I paid the taxes and insured the property.
Call around - talk to commercial and business lending departments rather than home lending departments and residential lenders - after all you are doing it as a business.
Target small independent banks and or larger establishiments with business loan departments.
Last year, we bought a house in Hillsboro for 60k.
Paid 15k down and balloon payments of 15k for the next 3 years with no interest. We’ve been remodeling it and put it on the market 2 months ago. No bite yet.
There’s still a lot of work to be done, but the comps are about 150k-200k ARV. Running out of time. I’m considering getting a mortgage for the balance.