Investment Property Loans for Condos – 4plexowner?

[Lazy Daze]

Folks,

I am interested in purchasing condo units (starting with 2) in South San Diego as investment properties.

I have experience in managing rentals and know what I’m getting myself into.

I live in South San Diego and will be within 5 minutes of these properties I’m looking to buy.

I have been shopping around for loans and I am concerned about the “condo survey” that the lender will need in order to approve the loan.

The HOA is in trouble and owes a total of around 15k to various companies.

The condo is in great shape. It has a new roof that is less than 2 years old. The drive way was also re-laid at the same time.
Insurance is also covered till the end of 2009.
It’s also Fannie Mae approved.

Even though the debt is only around 15k, trash collection has stopped and electricity to common areas has been cut off.

The units that are for sale will cash flow well right away with prevailing rents.

Here’s something about me:
– will put down 20% to 30% (capable of putting down more, but would like to snap up more units later)
– stable job of 5 years
– save 4k to 5k a month (it’s not what you earn, it’s what you save that counts) that can be applied to future purchases
– no debt (pay off CC every month, no house loan, no car loan, no student loan, etc.)
– have cash reserves
– good credit

My plan is to buy 2 units initially and 1 additional unit every 3 to 4 months till I gain major control of the community which has 20+ units. Doing so, the HOA will not pose a problem as much in the future.

In the meantime, I am confident of my plan to turn the HOA around, after talking to homeowners who still have a vested stake in the community.
I will not elaborate the plan here – this post is long enough as it is.

Unfortunately, I believe that in the current economic climate, many lenders will reject the loan based solely on the condo survey. I have been shopping around.

I was wondering if my fellow Piggingtonians can point me in the right direction:

I would like to be able to talk to loan officers/underwriters who have the final say on loan approvals as I believe such a loan will in fact be low risk.

Or maybe you know of companies that specialize in these type of loans.

I just don’t want to get the loan rejected simply because the junior loan officers cannot deviate from guidelines they have been given.

I am interested in forming a long term relationship with a lender that I can work with going forward.

I’m hoping 4plexowner and others will chip in and help a fellow Piggington.

Thanks!

[barnaby33]

I would think membership in the community would require being here longer than 19 minutes and 24 seconds, but hey maybe the other posters you mentioned will chip in.
Josh

[barnaby33]

I would think membership in the community would require being here longer than 19 minutes and 24 seconds, but hey maybe the other posters you mentioned will chip in.
Josh

[barnaby33]

I would think membership in the community would require being here longer than 19 minutes and 24 seconds, but hey maybe the other posters you mentioned will chip in.
Josh

[barnaby33]

I would think membership in the community would require being here longer than 19 minutes and 24 seconds, but hey maybe the other posters you mentioned will chip in.
Josh

[barnaby33]

I would think membership in the community would require being here longer than 19 minutes and 24 seconds, but hey maybe the other posters you mentioned will chip in.
Josh

[4plexowner]

I think you are describing a situation where only a cash buyer has a chance of closing escrow

Hard to imagine that any loan underwriter is going to sign off on this deal

Pretty sweet if you are in a position to purchase for cash – but remember that when buying with cash you get a HUGE discount or you don’t buy with cash

Being able to buy with cash basically lets you be an asshole and say something like, “I’ll pay 65% of your asking price and we’ll close escrow in 14 days, take it or leave it”

Since the seller can’t sell to anyone but a cash buyer, they have very few options

[4plexowner]

I think you are describing a situation where only a cash buyer has a chance of closing escrow

Hard to imagine that any loan underwriter is going to sign off on this deal

Pretty sweet if you are in a position to purchase for cash – but remember that when buying with cash you get a HUGE discount or you don’t buy with cash

Being able to buy with cash basically lets you be an asshole and say something like, “I’ll pay 65% of your asking price and we’ll close escrow in 14 days, take it or leave it”

Since the seller can’t sell to anyone but a cash buyer, they have very few options

[4plexowner]

I think you are describing a situation where only a cash buyer has a chance of closing escrow

Hard to imagine that any loan underwriter is going to sign off on this deal

Pretty sweet if you are in a position to purchase for cash – but remember that when buying with cash you get a HUGE discount or you don’t buy with cash

Being able to buy with cash basically lets you be an asshole and say something like, “I’ll pay 65% of your asking price and we’ll close escrow in 14 days, take it or leave it”

Since the seller can’t sell to anyone but a cash buyer, they have very few options

[4plexowner]

I think you are describing a situation where only a cash buyer has a chance of closing escrow

Hard to imagine that any loan underwriter is going to sign off on this deal

Pretty sweet if you are in a position to purchase for cash – but remember that when buying with cash you get a HUGE discount or you don’t buy with cash

Being able to buy with cash basically lets you be an asshole and say something like, “I’ll pay 65% of your asking price and we’ll close escrow in 14 days, take it or leave it”

Since the seller can’t sell to anyone but a cash buyer, they have very few options

[4plexowner]

I think you are describing a situation where only a cash buyer has a chance of closing escrow

Hard to imagine that any loan underwriter is going to sign off on this deal

Pretty sweet if you are in a position to purchase for cash – but remember that when buying with cash you get a HUGE discount or you don’t buy with cash

Being able to buy with cash basically lets you be an asshole and say something like, “I’ll pay 65% of your asking price and we’ll close escrow in 14 days, take it or leave it”

Since the seller can’t sell to anyone but a cash buyer, they have very few options

[Kingside]

Will the numbers still work if you get a hard money lender at higher rates and fees instead of conventional financing? If you have a hard money lender lined up who you develop a relationship with, you could approach sellers as effectively offering cash to get discounts, and then refinance to conventional when conditions permit. Obviously there are risks with assuming this will happen. So be sure of your numbers and assumptions.

As a practical matter, I think a hard money lender is the only hands on decision making lender you will find that will be there for final say on loan approvals for investment property in the current lending climate.

[Kingside]

Will the numbers still work if you get a hard money lender at higher rates and fees instead of conventional financing? If you have a hard money lender lined up who you develop a relationship with, you could approach sellers as effectively offering cash to get discounts, and then refinance to conventional when conditions permit. Obviously there are risks with assuming this will happen. So be sure of your numbers and assumptions.

As a practical matter, I think a hard money lender is the only hands on decision making lender you will find that will be there for final say on loan approvals for investment property in the current lending climate.

[Kingside]

Will the numbers still work if you get a hard money lender at higher rates and fees instead of conventional financing? If you have a hard money lender lined up who you develop a relationship with, you could approach sellers as effectively offering cash to get discounts, and then refinance to conventional when conditions permit. Obviously there are risks with assuming this will happen. So be sure of your numbers and assumptions.

As a practical matter, I think a hard money lender is the only hands on decision making lender you will find that will be there for final say on loan approvals for investment property in the current lending climate.

[Kingside]

Will the numbers still work if you get a hard money lender at higher rates and fees instead of conventional financing? If you have a hard money lender lined up who you develop a relationship with, you could approach sellers as effectively offering cash to get discounts, and then refinance to conventional when conditions permit. Obviously there are risks with assuming this will happen. So be sure of your numbers and assumptions.

As a practical matter, I think a hard money lender is the only hands on decision making lender you will find that will be there for final say on loan approvals for investment property in the current lending climate.

[Author]

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