Obtaining Real Estate Loan Prequalification Letters for Investment Properties
In nearly every city or town in America there are a few different types of real estate agents and brokers. Some of these professionals deal primarily in single family homes for individuals, others deal with commercial real estate transactions, and yet a third type deal primarily in investment real estate. If you are looking to invest in the real estate market, you will want to find a real estate agent or broker who deals with investment properties and the unique needs of real estate investors on a day-to-day basis.
The Investment Real Estate Specialist
The reason for dealing with a realtor who specializes in investment properties and transactions specifically with investors is simple; they understand what we do for a living and how we handle our transactions differently than other real estate buyers.
For example, real estate loan prequalification letters have become the norm these days for anyone who wants a realtor to show them available property. And, if you think about it, this does make sense for the realtors. Why should they bother spending their valuable time with buyers who cannot ultimately qualify for a loan? They don’t want to. So, they pretty much all require home loan prequalification before they will deal much with a buyer these days.
The good news is that for those of us who are investors, and who often use creative financing in one form or another on our deals, we are able to do business with the investment real estate agents without having to produce mortgage loan prequalification letters and lots of other documentation. All we have to do is let them know that if they can find us the deal, then we can get it financed one way or another.
Hard Money Lenders and Real Estate Loan Prequalification Letters
If you will be using hard money for your investment transaction, then it is possible for you to get a hard money lender to write you a mortgage loan prequalification letter. The hard money lenders deal with realtors as well, and they understand that some of them can be pretty insistent on mortgage loan prequalification.
Ultimately, if you deal with an investment realtor and try to avoid those who do not thoroughly understand our business, you should be able to minimize your document and prequalification headaches.
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Commercial loans can work several different ways……here is one way:
A developer wants to start a project, first they locate people that invest in their idea (if they can't handle the expense themselves which is where most of the money is). Then they complete the project on time and under budget. Then one of two things happens, they either run the business or they sell the project to people who knows the field of the project. They then sell space to leasers or renters. Presto, commercial lending.
2-5 points
Problem #1, you didn't shop enough
Problem #2, you actually signed for the 11% loan.
Talk to your friends and family, coworkers, etc… Get referrals to people that they've done business with and would trust to do business with again.
Unfortunately, high FICO's don't directly correlate to high IQ's, so anyone can be taken advantage of, regardless of credit. Your loan officer was either incompetent, a scumbag, or both. My money is on both.
Your mom or dad. Better yet, kill your parents and take their house.
Most government grants are in blighted areas where they want to spur rehabilitation of neighborhood properties. As far as I know there are no federal grants avalable unless you are revitalizing a property which will end up on the national register of historic properties, but these would have little to no profit potential due to the high cost of rehab to get the property to standards. The local programs generally only give 5-20k for help in rehabbing homes, but unfortunately come with so many strings attached that you will be begging them to take their money back just so you can get them out of your hair. Once you invite them in, you many times lose the grandfather clauses on any number of code requirements that have been put in place since the particular home was built and you have to spend as much if not more than the grant money to get the place up to the government standards that they require in exchange for the grant.
In my honest opinion, better to just get your own loan and go it alone….
It will try to buy a $100,000 loan for $30,000 and hopefully forclcose and sell home for $40,000.
I know several agents that are mortgage brokers and real estate agents… it is not illegal.
They can NOT force you to use them for the mortgage, and if they give you "cash back" from their commission if you use them… their could be legal issues with that.
But offering you a mortgage as well as being your REA is perfectly fine.
Cash for the land. A construction laon for the building, but you are going to need to give the bank 25% in cash for the down payment on that.
Cool…I never heard of these terms before and I've been involved with real estate for over 20 years in my career. Thanks for teaching me!
Apparently this has to do with 'Settlement', not really loans or mortgages. I found this:
"…You referenced a "wet settlement." This is a term of art, which means that when a person goes to settlement, the lender's funds must be on the table.
Compare this to a "dry settlement," where there is no money available at the closing. Usually, the settlement company or attorney will complete the paperwork, send the legal documents to the lender for review, and then the lender will fund the transaction…"
Found at this site: http://realtytimes.com/rtcpages/20060529_wetsettlement.htm
Looking forward to learning more,
Elise Altergott, Principal Broker
Associate Mortgage: http://www.web-mtg.com/?src=answers
Associate Consulting: http://www.ac-fl.com/?src=answers
I owned a company that funded small businesses, micro-businesses, and mezzanine corporations. I searched for information on how you can start. Information is limited. I wonder why it is such a well kept secret. Possibly because there is lots of money to made financing business, but there also is a lot of risk. The only info is
http://www.businesslenders.com/why_history.htm
My advice is, unless you have unlimited financial resources, start small with micro-loans. They are easy to do and their is tremendous funding out there for companies and organizations to give consumers. Grants are available through the government for the micro-loans but only to organizations who give the loans. Banks also offer money as well as foundations.
If you have any questions contact me. I will assist you and if I do not have all the answers I will try to get them