Thursday, August 13, 2009

Utah Credit Union Equity Lines for Investment Real Estate

Investment Real Estate Financing Alert!

Utah real estate investors have been searching for over a year for how to get fast, effective financing in place for their investment properties. I won't go into the obstacles in detail, but they have included:
  • Property seasoning of 1+ years
  • Unreasonabley high standard for credit scores and W-2 income
  • Bad appraisales
  • Unknowledgable loan officers
  • Very high interest rates
  • etc, etc, etc
There is now a great opportunity for the right properties and the right borrowers. Some Utah credit unions have developed a loan product with the following general guidelines:
  • Home equity line of credit
  • Up to 65% LTV of appraised value for investment properties
  • In-house appraiser who will talk with owner and understand the property
  • NO SEASONING- apply the day after you purchase the property
  • Interest rate at prime+1.5% (currently at 4.5%)
  • Property must be in live-in condition (no pre-rehab junkers)
  • Borrow must have W-2 income and 700+ credit score
  • Borrower must be a member of the credit union (generally $25 in a savings account)
  • Origination fee about 1%
Clear Day Capital had two borrowers use this program at Golden West Credit Untion, working with Nate Cox at 801.786.8452. The first purchased a rehab, did the fix-up and paid us back using his equity line from Golden West in about 5 weeks.

The second was completed in under 3 weeks, the property was already in live-in condition.

I understand that other Utah Credit unions offer similar programs. When I get confirmation of which ones I'll let you know. Can you confirm similar programs? Does anyone have any other good investment financing to share?

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