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?