Personal Finance Resources

Docs, docs, docs. Lenders never seem to get enough documentation. And this was supposed to be a simple deal. Well, in theory, there are a lot things that are simple, but when you get down to actually doing it, things get a little hairy. My lender told me yesterday that they needed to have a copy of the insurance binder, a letter of good standing for the LLC that the properties will be listed under, and that the appraisal STILL hasn’t come in. So I went to work.

We had quotes on insurance costs already, so we went to the insurer and got them signed and paid. So the insurance binder was turned in the same day. So one thing got crossed off the list. But the state showed the LLC not in good standing because of a franchise no tax due statement had not been filed. So we got with the CPA, got the appropriate forms filled out and signed, and went down to the state comptroller office. But the office was closed that day for the Christmas season.

So that shot down our hopes for a Friday close. So today, I got the forms turned in, and the statement of good standing from the state, and faxed it to the lender. I confirmed with him that there was nothing left except the appraisal, which as of today, has STILL NOT been submitted. I wonder what my appraiser is doing…he viewed the properties 5 days ago, and still hasn’t put together the documentation. I guess we will see, stay tuned…

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When you are buying or selling real estate, there is often several players involved in the transaction. Home inspectors, termite inspectors, appraisers, surveyors, lenders, real estate agents, buyers, sellers, renters, escrow agents, and lawyers are among some of the parties involved. It is a pretty good situation for almost everyone involved, except for the renter. For the renter, it is nothing but a hassle.

With several of the listed players involved in the transaction, the renter is going to bothered several times prior to closing to get inspections and appraisals completed. The renter has a contract that has to be honored by the new buyer, but the buyer must complete their due-diligence in order to close the property. So careful coordination needs to take place.

In my current deal on 5 units here in Belton, TX, I called the selling agent, and left a message telling him I would like to get into the property for a termite inspection. Well, unfortunately he was away for the weekend, and didn’t get my message until after we did the termite inspection. Of course, one of the renters was very angry, because it was 9 AM, and she didn’t have the place ready for company.

So the moral of this story is, try your best to get a hold of the different parties involved, and let them know what is going on, don’t just rely on one party to relay your message to the others, take personal responsibility for it. The process will go much smoother that way.

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If you own property, you probably know just how hard it is to get a contract closed, especially if you are an agent, and not the buyer. There are so many lender requirements these days that it makes it very difficult to get a property closed. And if time is of the essence in your contract, then you must make sure to push and push on the lender to get the deal closed.

Currently, I am still working the 5 units that we have under contract here in Belton, TX. We have a solid contract, and have just decided on how to structure the financing, and how to convey title. So this morning, I will be taking the loan application back to the lender for approval. I am working with an investor that has some good loose cash, strong income, no debt, and fantastic credit. This type of person is a rare gem out there today. Most people have bad credit, no cash, and no income.

So the process should be quick and painless for us on this deal. We are going to be doing a typical commercial loan, hopefully 20 year amortization, 5 year balloon, 25% down (although I think my investor is going to put down 40%) with an interest rate of around 6-7%. So he is setting himself up for great cash flow on these properties, and if he needs to sell out at some point, he will be able to do so.

So for me, I just need to get the application to the lender, push to get the appraisal in, finish getting the properties inspected, and work with the title company to ensure the correct title work will be done. I have already sent copies of the surveys to the lender, so barring any unforeseen circumstances, we should be able to close this property by the end of the month.

If you have comments or questions, please leave them below.

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