Mortgage Broker

When I first established a relationship with my RE agent, she mentioned that she knew of a mortgage broker who dealt a lot with investors, and could probably get me some good deals regarding financing. Up until now, I haven't given it much thought, but seing as how I will probably need a financeer for the REO's I'm looking at, I figured I better get in touch with this person to see his services.

I sent him an email right before I left work yesterday afternoon. Here is the entire email for your viewing pleasure (names ommitted to protect the innocent):

Hi Mr. [Name],

I was referred to you by [My RE Agent] from [My RE Agent's Company]. I am a real estate investor, and wanted to touch base with you on services you could offer me. Primarily, I am looking for financing that requires very little, if any, out-of-pocket expenses on my part upfront. [My RE Agent] mentioned you have good rates on 100% investor loans as well as interest-only loans. I would like to get more information on these as well as any other investor-type loans, like 103% financed loans and repair loans).

I'll give you a better understanding of my position. I plan to buy properties on the wholesale market. Most of the properties will require repairs of some magnitude, but not all. If the property does require rehabbing, I'll get a crew in to repair it to retail marketable condition. I will then sell the property on the retail market. While it is impossible to predict repair and holding lengths for any property, I would estimate the majority would go from wholesale purchase to retail sale in a matter of a few months to no more than a year. I understand many lenders have seasoning issues that require the owner to hold the property for 6 months to a year or more. Seeing as how I would like to unload the properties as quickly as possible, holding them for uneccessary periods of time would work counterintuitive to my needs.

Please let me know what services you have available for my investment needs. I would also like to know the going rates for these types of loans as well as underwriting costs/fees. I realize rates and fees fluctuate daily, but I want to get a better understanding of how to position myself when purchasing properties.

I look forward to doing business with you.

Regards,
[My Full Name]

I wasn't exactly sure what kind of response I would get (if at all). I left work, and went to go look at the one REO I couldn't find the previous day. When I got home, I unraveled, ate dinner, played with my daughter, etc. Later in the evening, I thought I would check my email. Sure enough, I had gotten a response from the mortgage broker. He had sent a reply to my email within an hour of me sending it. Although he didn't really answer my questions about current rates, he does sound like good lead if I need money. Here was his response:

Steve,

We do in fact have many investor loans that don't require any down payment. In fact I closed a set of 5 four-plexes for a group of investors in December that resulted in them getting about $5,000 at closing and they had over $35,000 in their account from collected rent before they had to make their $13,000 payment in Feb, giving them a $22,000 cushion without ANY out of pocket expense.

The scenario that you describe is one that I have thought through with several of my investor clients. I have started to implement a system of financing that results in them being able to buy a property without any money out of pocket and then within only a few weeks refinance that property in order to get cash out for repairs and other cash-flow needs. You're right about a lot of lenders requiring seasoning before selling or refinancing, but we have relationships with lenders who don't require any seasoning, and offer VERY competitive rates. Give me a call and let's schedule a time to get together and talk about your specific situation. I could go on and on about what I've done for other people, but I can't know what I can do for you until I know what your credit and financial situation look like.

I look forward to hearing from you.

Thanks,

[Name and Number]

I'll be busy today after work with other things I've scheduled, but I'll try to make room today to AT LEAST give this person a call. I also have to still set up a meeting with my insurance agent to discuss rates he can offer me on rentals and houses that are not owner-occupied/empty.

It's amazing all the work I've done to this point to get the ball rolling on my REI venture, yet I still haven't made a succesfull deal yet. Hopefully, with my perceverence, I'll get one under wraps soon.