Cross Collateralizing - Posted by Ron

Posted by Paul Macdonald on November 09, 2000 at 14:36:24:

With good credit get a NO DOC or a NO RATIO cash out loan. Up to 90% available. Find a good broker/banker and tell them thats what you want. You don’t even mention what you earn vs. what you owe.

But it’s got to be really good credit.

Good Hunting.

Cross Collateralizing - Posted by Ron

Posted by Ron on November 05, 2000 at 21:13:58:

I am a newbie to this forum (about 1 week) and am finding it so interesting my hours of sleep have decreased to about 4 a night! Over the last several years I have “dabbled” in real estate investing and had a few successes…but have now decided to get really serious! I have an immediate opportunity to purchase a bank owned(out of state bank and they are a hard nosed bunch!) property for $29,000. The property needs an accurately estimated $10,000 worth of fix-up. After fix-up appraised value is $55,000. We have A credit but very high debt-to-income because of previous unpaid business expenses and are not able at this time to obtain conventional investment financing. We own our own home with approx. $60,000 equity. What I would like to do is this: Borrow $39,000 for purchase and fix-up by using $30,000 of my personal home equity added to the after fix-up appraised value of $55,000 for a total value of $85,000. Question: Are there any hard money lenders who may make this type loan - actually less than 50% LTV - at let’s say 15% and as many as 10 points? Or are there other ways I should pursue financing?

Re: Cross Collateralizing - Posted by Paul_MA

Posted by Paul_MA on November 06, 2000 at 02:14:12:


With your good credit, mortgage brokers can get you ‘low-doc’ loans of up to 80% LTV on a refinance. Some brokers can do better.

On purchases, they still want you to have 10-20% into the deal. The reason is that you can walk if you have nothing into it.

Try these avenues before you go for hard money. If you still want the hard money, email me. I’ve got a long list of lenders, some are hard money.

Good Luck

Re: Cross Collateralizing - Posted by Dave T

Posted by Dave T on November 05, 2000 at 22:29:00:

Have you explored a conventional home equity loan? A hard money loan at a 15% interest rate and 10 points sure eats up your profit quickly. Your holding/carrying costs may eat up whatever profit is left.

You don’t say what you want to do with this property. Would you consider just purchasing for $29K, then assigning your contract to another investor for $1000 or perhaps $1500? This way, you don’t use any of your own money to make a small profit on this deal. You avoid the hard-money lending rates and points entirely.

Re: Cross Collateralizing - Posted by Ron (VA)

Posted by Ron (VA) on November 06, 2000 at 12:57:18:


Thanks a lot for the follow-up and your comments. A refinance is pretty much a “no-go” right now because of our high debt-to-income, even though our credit is excellent. If you would e-mail me your list of lenders, both conventional as well as hard money, I’d sure appreciate it. Thanks again.