Own small aprtmnt complex free/clear. Self-employed. Looking for best option to use equity to prchse another

Property in OakLawn area of Dallas. Fully occupied. Haveing trouble because of the self-employment thing. Seeking any suggestions/advice, as I'm looking at other properties in the same area. Thanks to all.
In Property Management - Asked by Bill K. - Feb 28, 2011
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Answer(s)

Cody L.
Corporate Investor
Houston, TX

The only thing I can suggest is a small(ish) local bank.
Get a list of small local banks in the Dallas area. Put together a short power point presentation, and call each one. Most will tell you they're not lending on multifamily, period. You'll get a few that will meet. Then just show what you've done, explain you're looking to pull out a conservative amount of equity on a stabilized fully occupied building. If you have all the financials on you/your property, your tax returns, etc. all ready to go you'll at least stand a shot with anyone that *is* lending.
Just don't have your expectations set too high... It's not you, it's the lenders. They were not making rational decision making before -- lending to people they shouldn't. Now they're now they're not lending to people they should
The first property I bought was in an area that's extremely easy to rent, but the building had a few vacancies due to mismanagement (an 8 unit). Due to 2 vacancies, no bank would lend. This caused a great asset to be super cheap (not many buyers can pay cash, and lenders wouldn't lend). So I paid cash at a discount, filled the building, and kept it 100% full for years.
Even after years of stability, I was never able to refi. Not even at a 50% LTV.
Finally I sold it via seller financing to a buyer with 30% down. That was the best way I found to pull out equity. And because I offered seller financing, and it was stabilized, I was able to sell at a premium. The 30% the buyer put down cashed me out about 50% of my original purchase price... So it was a better "cash out" than I could have gotten from a bank. You might want to think about doing something similar. It sucks to have to sell a good property, but since banks don't recognize good properties it might be your only option.

Mar 4, 2011
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Appreciable A.
Corporate Investor
Virginia Beach, VA

Actually your best option would be to ask for a HELOC, (Home Equity Line Of Credit), That way you have enough for a down payment or to buy the next property in its totality. HELOC have a credit card interest rate so all you do is search for a refinance company that does have a seasoning requirement. This does assume sufficient equity, (20-30 at least), in the newly purchased property.
After you've done this about twice you won't need any more money because you will have "Equity Credit Cards" using the Heloc.

Mar 13, 2011
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Chris R.
Broker/Agent
Denton, TX

Locally owned / based banks / credit unions are your best bet.

Apr 23, 2011
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Appreciable A.
Corporate Investor
Virginia Beach, VA

Hey Bill shoot me us an email at app.assets@gmail.com. We have a program you may be interested in and it allows you to keep you equity.

Jul 2, 2011
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Vivian C.
Owner/Investor
Redondo Beach, CA

Borrow a percentage of equity against your own existing property and use that to leverage with local bank for higher LTV.

Jul 19, 2011
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