At LMWilliamsFunding, we're committed to providing you with the best rental property loans and private lenders for real estate available on the market today. Whether you need funding for a property purchase or are looking to secure financing for an investment project, our team is here to help. Let's take a look at some of the most frequently asked questions we receive from our clients.
CAN I USE MY FREE AND CLEAR PROPERTY TO FUND FUTURE NON-OWNER OCCUPIED INVESTMENTS?
Yes! It may be used as cross-collateral or for a cash-out refinance. That's a fantastic plan! We can undertake a cash-out refinancing to give money for other non-owner-occupied projects if you've got properties that are entirely paid for with no liens against them. You may also utilize them as cross-collateral in your real estate investing. We utilize both your subject property and your free and clear property as security for the loan.
HOW DOES LMWILLIAMSFUNDING DECIDE HOW MUCH TO LEND?
Our decision is based on the property, the type of transaction, and any of our special programs in which you are a member. We will usually lend up to 90% of the purchase price, or 65% of the as-is or after-repair appraised value, whichever is lower. Ask one of our loan officers about the special terms available through our membership programs and special purpose loans.
CAN LMWILLIAMSFUNDING PROVIDE 100% FINANCING?
Yes — just ask one of our loan officers for more details. If you offer more than one property as collateral (as outlined above in connection with cross-collateral) we can give you 100% financing. If you don't have free and clear real estate, locate a partner who does! Sharing half of a fantastic return is preferable to not being able to do the deal! Many of our investors utilize seller-carryback to accomplish the same outcome. We suggest obtaining 100% financing by purchasing properties below market value.
WHERE CAN I FIND A GOOD DEAL?
Look for those who have a desire to sell and contact them before your competitors do. The short answer is that the place with the least competition is where you should look. The more difficult they are to find, the less competition you will have, and the greater your chances of obtaining a good price. This requires work, but it is work that can end in a deal with profit! Try talking to probate or divorce attorneys, find "ugly houses," or contact out-of-state owners. Be creative!
DO YOU LEND FOR BOTH PURCHASE AND REPAIRS?
Yes — for the right deals. We will lend on the After Repair Value (ARV) if the figures check out and we believe the deal will be successful. We suggest that you have considerable expertise in repair work or administration. You'll need a licensed contractor's quote as well as meet certain conditions. Come discuss the deal with us!
CAN I DO DEALS WITH MY IRA?
In this case, you should seek legal and financial advice first, as you must have a truly self-directed independent retirement account (IRA). There are many IRA administrators that offer such accounts, allowing you to buy the property in the name of the IRA, furnish the earnest money from the IRA, apply for the loan in the name of the IRA, pay all costs from the IRA, and put all the profit back into the IRA. This is a subject on which we don't have enough space to go in-depth. Please talk with your legal or financial advisor for more information.
I WANT TO BORROW MONEY BASED ON THE ARV OF THE INVESTMENT PROPERTY I'M PURCHASING OR OWN — IS THIS SOMETHING YOU ALLOW?
Absolutely — we love flippers! If the deal makes sense, we will help you get it done. Speak to one of our loan officers for more details.
WHY DO I NEED TO BUY AN APPRAISAL WHEN I ALREADY HAVE A CMA OR EXISTING APPRAISAL?
LMWilliamsFunding requires a recent (less than 90 days old), independent, standards-based, third party, as-is evaluation of every property to use as security. Generally, BPOs, CMAs, or outside appraisals do not satisfy all those requirements. Instead of relying on those three options, you’re likely better off getting an internal appraisal with LMWilliamsFunding! Our expert appraisers provide you with some of the best services in the industry, ensuring that your process goes as smoothly as possible.
WHAT ARE YOUR RATES AND LOAN ORIGINATION FEES?
When evaluating rental property loans, we base our decisions on logic and our loans on asset value, meaning those two things are dependent on your specific situation. Despite the subjectivity, our rates are always competitive and we always aim to provide our clients with the best rates possible. If you have a property under contract, reach out to us today for some of the best rates in the industry!
WILL YOU LEND ON OWNER-OCCUPIED PROPERTIES?
No. Unfortunately, for legal and regulatory reasons, we are not able to. At LMWilliamsFunding, we provide rental property loans ranging from three to 24 months and it is not cost-effective for us to deal with all of the regulations that surround owner-occupied contracts.
IS CREDIT THE DECIDING FACTOR IN LMWILLIAMS’ DECISION?
No. Our loans are based on the value and risk of asset ownership. We base our loans on the value of the asset, not on your credit score, income, or the size of your debts. However, a high credit score can potentially help us get you a better rate.
HOW LONG DOES IT TAKE TO CLOSE A TRANSACTION FROM START TO FINISH?
Most of the time, it takes us about three to four weeks from the time of complete submission to close a transaction. While we can do it faster, it will usually take us three to four weeks to wrap up a transaction. The real deciding factor depends on how long it takes to receive all of the required documentation. So, if you are hoping to work through the process quickly, submitting all of the required documentation in an expedited manner is the best way to work through the transaction quickly! Just keep in mind that if time to close is a factor, you likely have competition.
HOW MUCH DOES THE APPRAISAL COST?
Rates are determined by the going rates for appraisals in your market. This could vary between $300 and $600 (or more). The appraisal price also depends on the property type and location. A typical single-family residence, condo, townhouse, or manufactured home may cost between $395 and $575. Multi-family units may cost between $550 and $645. If the property is in a rural area, it may cost more because of added drive time or appraiser availability.
I’M A SOLE PROPRIETOR. CAN I STILL GET A LOAN?
Yes, if you create an LLC, a corporation, an IRA, or a trust before the close of escrow.
I AM SEEING A LOT OF GOOD DEALS ON AUCTION SITES AND AT LIVE AUCTIONS. HOW CAN I PROCURE FUNDS TO HAVE CASHIER’S CHECKS READY TO PAY FOR THE PROPERTY AT AUCTION?
Our funding is solely based on properties you already control via ownership or contract. We cannot provide cash in advance for auctions that require immediate payment. Since all rental property loans are asset-based, we must have a lien as security on property you own. The primary way to procure funding prior to getting a property under contract is to have another property that is free and clear and take out a loan against it. Alternatively, you can find a professional auction bidder who will supply the bidding presence and the purchase cash in exchange for a fee (often $5-10 thousand or a percentage) with the rest of the funds paid later at close of escrow.
I ATTENDED A SEMINAR THIS WEEKEND SPONSORED BY ANOTHER COMPANY. THEY DESCRIBED TERMS AND CONDITIONS OF RENTAL PROPERTY LOANS I LIKED, BUT YOUR WEBSITE DOES NOT INCLUDE THEM. WHY?
We are aware of this confusion. We work closely with other companies to assure accurate descriptions, but misunderstandings sometimes occur. We have seen others who are not a part of our company describe a specific detail that is inconsistent with our lending guidelines. As one of the nation’s most reliable rental property lenders that can be counted on to have the funds to do their students’ deals, many real estate investment gurus have chosen us as their preferred lending source. After we train their trainers, they train someone else, who trains someone else resulting in a real-life game of telephone. It is not surprising that slight discrepancies may creep in, even with the best intentions. Chances are pretty good they got most of it right, but please ask them to contact us or provide us with their name so we can clarify the details they share with future students.