San Francisco Chronicle - (Sunday)
Quick work, private funding save investment property deal
It’s imperative that borrowers understand all the loan options available to them. Finding a lender whom you trust and who will listen to you is important.
Mortgage adviser:
Connie Madrid, All California Mortgage.
Property type: Threeunit property in Oakland. Purchase price: $1.05 million. Loan amount: $682,500. Rate: 8%.
APR: 9.247%.
Backstory: An investor looking to purchase a threeunit building in Oakland called me because the lender she was working with was requiring a coborrower.
Referred to me by a successful commercial broker, the investor was in a bind. She only had 19 days left to close escrow. We had to act fast.
Initially I thought she might be able to qualify with FHA financing. However, I soon realized that our borrower’s real issue was that she was newly selfemployed.
Conventional financing requires a twoyear history of selfemployment. Some lenders allow for a oneyear history, but in this case she didn’t qualify. Ultimately, I found the right loan source — a private money loan.
Fortunately, we have a division in our company that specializes in this package. To be approved for this type of financing we had to demonstrate an exit strategy to show she could refinance into a conventional loan within the next year or two.
Between her income from the new property and income from her selfemployment, we determined she was qualified for private financing. She was so happy when I called her five days after our first conversation to let her know necessary documents were going to the title company.
We got it done and closed in 17 days.
It’s imperative that borrowers understand all the loan options available to them. Finding a lender whom you trust and who will listen to you is important. This example shows why it is so critical for borrowers to get fully preapproved before making an offer.
If you or someone you know wants to avoid a lastminute scramble like I’ve described, feel free to reach out. I’m here to help you.
Connie Madrid, All California
Mortgage, 7077650629, cmadrid@allcalifornia.com.