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Old 12-04-2013, 06:32 PM
 
3 posts, read 13,958 times
Reputation: 11

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Hello everyone,

I've done a search and couldn't find the answer, so I am hopeful someone can help. I am a Canadian and I have a NY LLC that owns two rental properties. These properties were paid for in cash and are fully rented. The approximate FMV of them is $150,000.

I've been told that because my corp does not have any americans in it, I won't be able to get a mortgage on a new property. However, I'm wondering whether or not I can get a HELOC against the properties I currently own and use that money to buy the next house. I'd love to be able to mortgage properties, but I'm not sure if that's possible.

I currently bank with BOA, but they aren't much help on the phone dealing with this issue.

Thank you very much once again for all your help!!
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Old 12-04-2013, 06:49 PM
 
16,524 posts, read 17,581,310 times
Reputation: 23645
What you are planning on doing is what got a ton of people in trouble. You're adding a lot of risk by taking out a HELOC and doing what you plan. I have never borrowed against my properties.
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Old 12-04-2013, 07:12 PM
 
Location: MID ATLANTIC
7,604 posts, read 17,652,971 times
Reputation: 8099
At this time, I don't know anyone that is lending to Foreign Nationals, especially someone that does not work or reside in the States. These days, it's so much more than just the security on the home, it's where the borrower banks and earns their money (and the bank's ability to garnish). The fact that this is a Limited Liability Corp emphasizes the reasons why a bank will not lend.
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Old 12-05-2013, 08:22 AM
 
Location: Southern California
4,350 posts, read 4,942,333 times
Reputation: 2129
Quote:
Originally Posted by 3dmt View Post
Hello everyone,

I've done a search and couldn't find the answer, so I am hopeful someone can help. I am a Canadian and I have a NY LLC that owns two rental properties. These properties were paid for in cash and are fully rented. The approximate FMV of them is $150,000.

I've been told that because my corp does not have any americans in it, I won't be able to get a mortgage on a new property. However, I'm wondering whether or not I can get a HELOC against the properties I currently own and use that money to buy the next house. I'd love to be able to mortgage properties, but I'm not sure if that's possible.

I currently bank with BOA, but they aren't much help on the phone dealing with this issue.

Thank you very much once again for all your help!!
Mortgages offered are based on location. In California a lender offered a non owner occupied, investment properties, to foreign nationals, stated income loan, but ended the program in December. If you called different loan brokers in California, they might have not offered it and would have told you they don't exist. I haven't heard of HELOC on Non Owner Occupied properties in the last few years. I know there are hard money lenders that charge in the double digits interest rates, but even then I don't know if you and your properties would qualify based on your LLC, etc.

Was BOFA the only place you shopped for a mortgage? I think they would be very limited in what they could offer you.

I've been told that there are still foreign national programs but haven't had a need to try them out, nor have I looked into occupancy requirement.

You might be able to find something, but I'd say try to find a lender local to the properties rather than the internet.

I can even give an example where a loan product was offered in Northern California but not Southern California.
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Old 12-05-2013, 08:50 AM
 
3 posts, read 13,958 times
Reputation: 11
I do appreciate the insight. I have cash to buy properties, but obviously it's easier to use other people's money!

If HELOC's aren't available, are there any other options that anyone can provide information about? Hard money loans?

Last edited by 3dmt; 12-05-2013 at 09:00 AM..
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Old 12-05-2013, 09:40 AM
 
Location: Southern California
4,350 posts, read 4,942,333 times
Reputation: 2129
Quote:
Originally Posted by 3dmt View Post
I do appreciate the insight. I have cash to buy properties, but obviously it's easier to use other people's money!

If HELOC's aren't available, are there any other options that anyone can provide information about? Hard money loans?
OPM sounds like you know what you are doing and leave us US tax payers with the bill
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Old 12-05-2013, 10:44 AM
 
4,546 posts, read 11,559,286 times
Reputation: 3068
Quote:
Originally Posted by thelopez2 View Post
OPM sounds like you know what you are doing and leave us US tax payers with the bill
Quote:
Originally Posted by Electrician4you View Post
What you are planning on doing is what got a ton of people in trouble. You're adding a lot of risk by taking out a HELOC and doing what you plan. I have never borrowed against my properties.
Really...so if someone borrows up to say 50% LTV on their rentals to buy more rentals for cash, you see a high risk of default?? Some leverage can be a valuable tool for a business.
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Old 12-05-2013, 12:01 PM
 
Location: Southern California
4,350 posts, read 4,942,333 times
Reputation: 2129
Quote:
Originally Posted by TimtheGuy View Post
Really...so if someone borrows up to say 50% LTV on their rentals to buy more rentals for cash, you see a high risk of default?? Some leverage can be a valuable tool for a business.
I'd consider cash flow versus LTV to evaluate risk of default. If it flows at 80% and even negative equity, why would someone dump it. My comment was a light hearted joke. It would be hard to be in lending if I didn't believe in leverage.
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Old 12-05-2013, 12:18 PM
 
4,546 posts, read 11,559,286 times
Reputation: 3068
Quote:
Originally Posted by thelopez2 View Post
I'd consider cash flow versus LTV to evaluate risk of default. If it flows at 80% and even negative equity, why would someone dump it. My comment was a light hearted joke. It would be hard to be in lending if I didn't believe in leverage.
I thought it was a bit odd coming from you, but pretty sure the other poster I referenced was dead serious.
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Old 12-05-2013, 12:21 PM
 
3 posts, read 13,958 times
Reputation: 11
My plan wasn't to leverage the entire value of the property, but as Tim suggested, if I can leverage 50% that means I can buy two properties. I appreciate everyone's help.
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