Finding financing

[Castoral]

I'm very new to the MMM forums, but I'm loving the idea.DH and I also started out very young building our next egg, but we also had 4 kids young (we're 30 with 4 kids 6 and under). On top of our regular savings though, we've found a niche with investment properties. We currently have two town home type condos in the same complex. Appraised value is $90,000 and we bought one for $49,000 (needed complete gut for $12,000 though) and one for $60,000 (needed about $5k in work). We've owned them approx two years and one rents for $950, the other for $900. We have 2+ yr renters in one and 5+ yr renters in the other. For those we took personal loans from my parents for a combined $90,000. After two years we owe about $66,000.

There is currently another property in the complex for $55,000 and we already have a renter (current renters brother). The problem is we cannot find financing locally. The second they hear its a condo, they say no. Second properties of single family homes, no problem, but they won't touch condos due to high foreclosure rates. Does anyone have any suggestions for a larger bank that may not be in our area but will be open to investment loans on condos. We have credit scores over 800, income to cover both mortgages (our current mortgage is about 10% of take home pay), about $100k of equity in our current $200k home, 25% to put down.

We do currently have a HELOC open (so we could pay back my parents a little quicker), but I hate the variable rate thing. I think it tops out at 7% and that scares me. I really just want something fixed.

[arebelspy]

Start making calls.  Local banks, credit unions, etc.

Private money is a possibility, but doesn't sound like what you want (low interest rate fixed for a long term).

I think a bigger issue than the condo is the small loan amount.  Many banks don't want to make a loan under 50k - the work isn't worth the amount they make. 

[S0VERE1GN]

What's the leverage the current owner's have on the condo? often times loan assumption can be an option. if they're currently renting, they would probably let go of the obligation to pay for very little cash up front. (think security deposit, not equity buyout)

Once the building is deeded to you, financing moves become easier. just dot your i's and cross your t's. in the land of loan assumption, thar be dragons.

[Castoral]

What's the leverage the current owner's have on the condo? often times loan assumption can be an option. if they're currently renting, they would probably let go of the obligation to pay for very little cash up front. (think security deposit, not equity buyout)

Once the building is deeded to you, financing moves become easier. just dot your i's and cross your t's. in the land of loan assumption, thar be dragons.

The current property we are looking at is bank owned, but we havent made it far enough in the process yet to see if we could get approved through the bank that currently owns the property, but thats surely an idea since they have an interest in the property.

The first one we bought was bank owned as well, but with a smaller local bank. They flat out said they could not do anything for us no matter what we put down or our credit scores.

The second was something shady....still dont even know the whirlwind we went through, but we know it was cheap! LOL! Basically a "buddy" of the realtor was in a distressed situation, he bought it from him, and then was losing it himself and willing to sell far below value. We had to spend a lot of time making sure everything was on the up and up, but all is good now. It was also a LONG 1.5 months totally gutting the place so our renters could move in on time.

We had Chase bank (local branch) interested in working with us, but they required paperwork to be filled out by the homeowners association (things like the financials of the HOA, etc). This would obviously cost though to have filled out. What is a reasonable amount for an HOA to charge for that? And would you go through with it knowing its a possibility the deal would fall through? (I'm thiking get offer accepted first, then try to obtain financing?)

[JohnGalt]

We have credit scores over 800, income to cover both mortgages (our current mortgage is about 10% of take home pay), about $100k of equity in our current $200k home, 25% to put down.

We do currently have a HELOC open (so we could pay back my parents a little quicker), but I hate the variable rate thing. I think it tops out at 7% and that scares me. I really just want something fixed.

What about a cash out refinance on the home or a second mortgage?