Existing home sales explode, up 27% from last year

Existing home sales have risen for the fifth consecutive month as the housing industry continues to show its resilience in the face of the COVID-19 pandemic. The National Association of Realtors reported Thursday that homes sales are up an astonishing 27% from the same time one year ago. In addition, it was reported this week […]

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Best Advice on Buying or Selling a Home During the Coronavirus Crisis

The coronavirus pandemic has made the logistics of buying and selling a home and moving more complicated, especially in hard-hit cities and communities. According to the National Association of Realtors, the number of homes for sale across the US continues to decline. Additionally, fewer potential buyers can or want to tour properties and risk contracting COVID-19.

The economic downturn—due to coronavirus stay-at-home mandates and social distancing—has resulted in pros and cons for both home buyers and sellers. I’ll cover advice to help both parties make wise real estate decisions during this uncertain time.

4 tips for home buyers during the coronavirus crisis

Since the coronavirus crisis began, more than 26 million Americans have filed for federal and state unemployment benefits. If you’ve lost part or all of your job or business income, and you’re unsure when your finances will return to normal, buying a home may not be the best idea.

But if your income is stable, you have cash in the bank, and you’re confident that you can stay in a home for at least five years, buying a home now might be a smart move. Here are four tips if you’re in the market to upsize, downsize, or become a first-time homeowner.

1. Evaluate your current and future budget

Buying a home is a significant financial commitment, so understanding how much you can afford is essential. If you’re at all worried about getting laid off or the future of your business, buying a home that’s under your budget is wise.

In addition to your mortgage payment, homeowners must cover many other expenses, including property taxes, home insurance, applicable association fees, and ongoing maintenance. Take a hard look at your income, expenses, and savings to make sure you have enough cash for closing and to keep a healthy emergency fund.

Take a hard look at your income, expenses, and savings to make sure you have enough cash for closing and to keep a healthy emergency fund.

Here are some ways to crunch your budget numbers:

  • Down payment: Depending on a home’s purchase price, your credit, and your lender, the required mortgage down payment could range from 3% to 10% of the purchase price.
  • Closing cash: At the closing table, you’ll need to pay the down payment plus additional expenses, which vary depending on location. They typically include fees for a home inspector, surveyor, property appraiser, credit check, loan underwriting, and homeowners insurance. The total could add up to around 2% to 5% of a home’s purchase price.
  • Monthly housing payment: Unless you have a high amount of debt, consider spending a maximum of 20% to 25% of your after-tax income for a home. It includes the mortgage principal, interest, taxes, and insurance—known as PITI.
  • Emergency savings: Keep a minimum of six months’ worth of living expenses on hand. This safety net will keep you safe from unexpected expenses or the loss of job or business income.
  • Maintenance reserve: Have cash ready for ongoing repairs, such as fixing a roof leak, replacing a heating or cooling system, or needing a new refrigerator. A good rule of thumb is to save 1% to 3% of your home’s value for annual maintenance.

2. Get preapproved for a mortgage

Before spending too much time or mental energy searching for a home, make sure you qualify for a desirable mortgage. The amount you can borrow, the interest rate, and your downpayment depend on a variety of factors, including your credit and income stability.  

Due to the economic crisis, lenders are expecting delinquencies from existing customers who are facing hardships. To offset those risks, they’re tightening lending standards for new borrowers making it more challenging to qualify. You may need better credit and more down payment money than was typical before the pandemic.

Due to the economic crisis, lenders are tightening lending standards for new borrowers making it more challenging to qualify.

A mortgage preapproval is a document that outlines how much a lender will allow you to borrow, at what rate, and for how long. It’s a critical tool to know the price range of homes you should be shopping for. Additionally, a preapproval can carry a lot of weight with a potential seller who may be evaluating multiple offers and needs to close quickly.

Remember that you still need emergency money in the bank after buying a home. The fact is, you need even higher amounts of cash on hand for a maintenance reserve. Also, consider other expenses such as moving and furnishing a new place, which can really add up.

3. Use technology to research and tour homes virtually

Many digital tools allow you to research potential homes and stay safe. Here are some ways you can find a new home from the safety and comfort of your existing one:

  • Video calls: Have a Zoom or Facetime call with potential real estate professionals or sellers. They can give you a virtual tour of the home and neighborhood and chat about other points of interest like schools, shopping, and public transportation.
  • Google Maps: Google’s street view allows you to see the features of a neighborhood and even walk it virtually. You can time your commute to work based on the time of day.
  • Neighborhood review sites: Check out the walkability, crime statistics, and school rankings using sites such as Walk Score, SpotCrime, Family Watchdog, AreaVibes, and GreatSchools.org.

Using a variety of resources, you should be able to narrow down your potential home choices significantly. If you can drive by properties, that will also help you know which ones you want to tour.

Once you have a mortgage preapproval and feel sure that you’re interested in buying a specific home or homes, inquire about getting physical access. If it’s vacant, an owner or real estate agent may be able to open it up and let you roam around with plenty of social distancing.

Home tour safety guidelines during social distancing may vary from state to state. Check with your real estate agent to get a better understanding of any requirements or limitations.

However, if the seller still lives in the property, they’ll likely want to make arrangements to be away or to stay outside while buyers tour their home. Be respectful of everyone’s desire to avoid the coronavirus by wearing masks, gloves, shoe coverings, and using hand sanitizer before going into a listing. Find out if anyone in the home has been sick or spent time with someone diagnosed with COVID-19. Likewise, disclose if you’ve been ill or exposed to the coronavirus.

4. Save money with a historically low mortgage rate

The rate for a 30-year fixed-rate mortgage is at a historic low and keeps going lower. According to mortgage rates on Bankrate.com, they fell to 3.55% from last week’s rate of 3.58%. If you want a 15-year fixed-rate loan, it could be as low as 3%. In many parts of the country, owning a home costs less per month than renting a similar property.

However, don’t wait too long to get a mortgage commitment if you’re a serious home buyer. Lenders are under enormous pressure due to a wave of potential defaults, forbearance requests, refinancing applications, and federal stimulus programs they may be processing and funding. As I mentioned, it’s only going to get more challenging to get a mortgage application through underwriting and approved.

Lower rates and monthly mortgage payments may allow you to afford a higher-priced home if your finances are in good shape.

But if you can lock in a low mortgage rate and get a property under contract, it can undoubtedly allow you to save money over the long run. Lower rates and monthly mortgage payments may allow you to afford a higher-priced home if your finances are in good shape.

In addition to low-rate mortgages, there may be bargains on the market, depending on where you want to live. If a seller is uncertain about their financial future, they may be willing to unload their property for a low price. Although many banks are offering forbearance programs, some homeowners may be feeling pressure to sell, giving buyers an advantage right now.

4 tips for home sellers during the coronavirus crisis

Selling a home anytime can be a hassle. But selling a property during a pandemic is probably something you’ve never thought about.

However, real estate closings are happening, so don’t think you can’t find a qualified buyer. Getting a deal may depend on creative marketing and finding a real estate agent who can help you find solutions to new challenges. Here are four tips to make your home attractive and safe for potential buyers.

1. Use technology to market your home

Creating virtual tours is critical to pique a buyer’s interest and reduce the number of strangers in your home. It’s never been easier to use a camera or smartphone to create videos of your home’s interior, exterior, amenities, and neighborhood. However, make sure the lighting is good and presents your home favorably.

You can upload videos to a variety of sites that buyers can access, such as a YouTube channel, Zillow, or Dropbox. If you have a real estate agent, they can include your video files in the multiple listing service (MLS) database and their company website. They may offer professional photographers and videographers as part of their listing services.

 

2. Vacate your home if possible

If you can move out of your home while it’s for sale, you may get more interest from buyers. Touring a vacant property may seem less risky to buyers and real estate agents. Plus, you won’t have to worry about people coming into your space that could be carrying the coronavirus.

If your mortgage lender offers forbearance, consider suspending your payments and using the money for a short-term rental.

If your mortgage lender offers forbearance, consider suspending your payments and using the money for a short-term rental. Getting distance between you and home buyers might be critical if you, or someone in your household, are elderly or have health conditions that make you vulnerable to COVID-19.

3. Be clear about how you’ll interact with buyers

If you can’t move out of your home, be clear about how you will protect yourself, agents, and potential buyers who want a tour. As the seller, you dictate the protocol, such as everyone must wear masks and sanitize their hands before entering.

Include information about measures you're willing to take, such as disinfecting high-touch surfaces and leaving doors and cabinets opens, so visitors don't need to touch anything. If you have hand sanitizer or personal protective gear to offer, that's a goodwill gesture that should make everyone feel more at ease.

Once you have a purchase agreement signed, you or your real estate agent will need to coordinate with other professionals, such as inspectors, appraisers, contractors, and surveyors. Depending on the buyer's lender, you should be able to complete a remote closing by mailing the original documents.

4. Be prepared for longer than normal marketing times

Since there are fewer buyers and many overwhelmed lenders, the average marketing time for homes across the country may be longer than usual. Being as creative and flexible as possible will increase the likelihood of signing a deal.

No one is sure what market value is right now, so buyers may be aggressive to find out how low you'll go.

If a buyer throws out a lowball offer, don't let it offend you. Carefully consider what your bottom line is and make an appropriate counteroffer. No one is sure what market value is right now, so buyers may be aggressive to find out how low you'll go.

While the fear of the coronavirus and a looming recession may make it more challenging to sell your home, remember that the lending environment is favorable. For buyers who aren't worried about losing a job or business income, getting a historically low home loan is a huge incentive to invest in a home sooner rather than later.

7 Expenses To Never Put On A Credit Card

Oh, credit cards. You either love them or you hate them. For me, I love them. I love the credit card rewards that come along with responsible credit card usage. However, I know I’m not the norm. I’ve seen the mess that credit cards have brought upon others, so I know that not everyone feels […]

The post 7 Expenses To Never Put On A Credit Card appeared first on Making Sense Of Cents.

Podcast #13: Commercial Lending and Real Estate

podcast 13 commercial lending and real estate
For this podcast about commercial lending I sat down with Angie Hoffman at U.S. Bank.  During the podcast we discussed investing in real estate, commercial lending, and how commerceial mortgages can help investors.  If you want to learn more about commercial loans this is a great pdocast for you.
I hope you enjoy the podcast and find it informative.  Please consider sharing with those who also may benefit. Listen via YouTube: You can connect with Angie on LinkedIn.  You can reach out to Angie for more information on their lending products by emailing her at angela.hoffman@usbank.com.
You can connect with me on Facebook, Pinterest, Twitter, LinkedIn, YouTube and Instagram.
About the author: The above article “Podcast #12:  Hard Money Lending” was provided by Luxury Real Estate Specialist Paul Sian. Paul can be reached at paul@CinciNKYRealEstate.com or by phone at 513-560-8002. If you’re thinking of selling or buying your investment or commercial business property I would love to share my marketing knowledge and expertise to help you.  Contact me today!
I work in the following Greater Cincinnati, OH and Northern KY areas: Alexandria, Amberly, Amelia, Anderson Township, Cincinnati, Batavia, Blue Ash, Covington, Edgewood, Florence, Fort Mitchell, Fort Thomas, Hebron, Hyde Park, Indian Hill, Kenwood, Madeira, Mariemont, Milford, Montgomery, Mt. Washington, Newport, Newtown, Norwood, Taylor Mill, Terrace Park, Union Township, and Villa Hills.
TRANSCRIPT
Commercial Lending Podcast
 
Paul Sian: Hello everybody. This is Paul Sian, Realtor with United Real Estate Home Connections, licensed in the State of Ohio and Kentucky. With me today is Angie Hoffman with US Bank. Angie how are you today?
Angie Hoffman: I’m doing great Paul. How are you?
Paul Sian:  Great. Thank you for being on my podcast. We’re gonna start off. Today’s topic is ‘Commercial Lending’. Angie is a commercial lender with US Bank, as I mentioned. Angie, why don’t you tell us a little bit by your background. What you do with the US bank, and how did you get started in that field?
Angie Hoffman: Sure. So, I am a Cincinnati resident, have been my entire life. Was previously with a company called the ‘Conner group’, which is located out of Dayton, Ohio. They’re a private investment real estate firm. I was with him for about five plus years, just learned a ton of information, really loved the financing portion of their group. So, that turned me to the banking portion, which I ended up going with US Bank just because of the knowledge and the breadth of what they can do as well. Just the culture within US Bank has been phenomenal. I’ve actually been with us Bank now for five years; in the last three years I’ve been within the commercial real estate side as well as the business banking side.
Paul Sian: Okay. Your primary focus is commercial loans.
Angie Hoffman: Correct. Yes, both investment real estate as well as owner-occupied and small to medium businesses. 
Paul Sian:  Okay. The investment side, I represent a lot of buyers of multifamily. I know with the form below we do, the conventional space generally, and then when you’re in the five units and above. You go into the commercial space, which is your space. I have also heard it being covered with mixed-use buildings, industrial properties, is there something else that commercial loans would cover?
Angie Hoffman: Correct. I mean it can really be quite an array of properties, office is one that we see pretty often, and can tend to be either hot in certain areas, whether it’s office Class B or Office Class A. Retail strip centers, we’ll look at Triple Net properties, and absolute not properties. We are very popular, if you’re looking at diversifying a multi-family portfolio and adding in some triple net properties. We also do, obviously owner-occupied properties too. When you have that small business or medium business owner who wants to own their own real estate. We do that as well, and that’s again part of what my position entails, and then we will also look at portfolios will do single-family homes. 
I’m actually working with somebody now who has a portfolio of several single-family homes, that were looking to kind of restructure and refinance for him. We can even utilize current equity and properties to purchase additional properties to help you grow your portfolio. We do try to have a full understanding of your portfolio or a full understanding of what your strategy is. How partner with you, as you continue to grow that portfolio short- and long-term goals.
Paul Sian: For our listeners, who don’t know. What Triple Net means, do you mind explaining that.
Angie Hoffman:  Sure. So, Triple Net is gonna tend to be your properties that have the tenant itself is paying the taxes, the insurance, you may have some pretty minimal depending upon the property, responsibilities that are usually restricted to the exterior of the building. It may be like a roof or a parking lot. Type of maintenance but generally speaking the great thing about the triple net is that for some clients, it’s a property that you can basically own, and you have to do pretty much nothing with. So, you’re gaining that income without having to do a very minimal type of responsibility or maintenance. 
The downfall of that is that typically they’re gonna be somebody, who is gonna be a longer-term lease, which is great. However, you still have the issue that it’s a bigger square footage generally. So, five, ten, twenty thousand plus square feet. If you lose a tenant obviously, that can be very impactful. It just depends upon your, again your focus of your portfolio, and if you want to add in that. But it can be great opportunity, but tends to again be a little bit less of a return. Because of the minimal responsibilities.
Paul Sian: Going back to single family. That is similar, I am using the same term your bank use but to ‘wrap mortgage’. Is that what you use for single families?
Angie Hoffman:  We do have the ability, from the perspective of what you say wrap mortgage.  We’re typically calling that like an umbrella, if you’re grouping all, let’s call it, if there’s ten single family homes. You’re grouping this all into one, it lies together. We have the ability to do that depending again on the structure that the client is looking for. 
We also have the ability to separate out those facilities, and do a simultaneous closing for each one of them to have them separated out from each other. Obviously, there’s some contingencies but that the properties itself have to be able to cash flow by themselves, things along those lines that we would underwrite to. But we do have ability to look at it from both perspectives.
Paul Sian: Okay. The biggest advantage of that if someone has reached the maximum ten convention mortgage loanlimit. They can step into your space there and you could cover them, and they can either restart that or. With something like that, let’s say somebody does get ten properties, and are they able to finance in additional properties into that same loan or is that has to re-finance each time?
Angie Hoffman: No. We would be able to add in. I mean, if you’re asking like if they want to refinance these properties, and they’re also looking to maybe either use some of the equity in them or they’re also buying at the same time. We can do all of that together, so that’s not an issue at all.
Paul Sian: Let’s say to somebody new coming to investment. What is the typical down payment on commercial loans? That are looking to buy in the mixed-use space or multifamily space?
Angie Hoffman: So, generally speaking. We’ll go up to 80% loan-to-value. The biggest factor within that is gonna be how much the capability of the property to hold that debt. We’re gonna have, we have a pretty. I don’t want to say complex but we do have  multiple factors that go within our cash flow, and net operating, income calculation, that we’re gonna want to see. It balanced to a certain point for it to be able to hold the debt at an 80% loan to value. Again, we tend to partner with our clients. I have several clients who will send me properties on a daily basis, that they’re interested in. We will let them know what the debt capacity would be on that property.
Paul Sian: Okay. Income from the rents per sale, let’s say, something’s got a ten-unit building. Then you’re looking at the rents that are coming in. You’re also considering the buyers income level, income to debt ratio, all that as well.
Angie Hoffman: Yes. When I talk about the capacity, the debt for the property is being the one of the first things we look at is. In order to get to that 80% LTV, if you’re looking at the actual depth, they’re wanting the property to take on. Compared to other rent they’re taking in and the expenses, as well as some vacancy factors, things like that. That’s what we’re looking at to have a certain ratio, then on top of that. When we get to the next step would be look at the client globally, and their personal debt to income, and that factor too.
Paul Sian: Looking at that commercial mortgages, can buyer use the mortgage to upgrade property, to build in some equity in the property. Does the building of the equity get taken into account, and do you have a loan that allows them to do that?
Angie Hoffman: That question is kind of twofold. If you have a property, let’s say, it’s multiple unit, and you’re continuing to kind of do some improvements and renovations. If the property has the equity, we can look at small lines of credit to help with that renovation cost. Then once everything’s complete to be able to wrap that together. If you’re looking at a property that’s completely distressed, and doesn’t have any type of income. Then that’s gonna be something that generally we’re gonna have a harder time with. Because it’s a speculative type of scenario, and we want to typically see the actual income.
Paul Sian: How about converting something, I am interested in buying warehouse, either in retail space or multifamily. Do you offer products for that, or is that a similar situation when you’re looking at the risk as being a little high?
Angie Hoffman: Yes. So, that is gonna be a similar situation. Once the actual project would be completed again from a speculative standpoint, it just it becomes a little bit more difficult from a risk perspective. However, we’ve been in scenarios where we’ve worked with clients and partnered clients, people we know who work in that space more than we do. We can look to, guide them to what we would look at if we wanted to refinance that once it was completed, and there were leases in place.
Paul Sian: Okay. So, that is one of the benefits working with a big bank like US bank, is you can reach across departments there, and tap other resources within your organization.
Angie Hoffman:  Even if it’s within the organization, we have other resources whether it’s our private wealth or wealth group, have some capabilities that are different than what we have as well as from a CUI or network basis. It may be somebody just within my network that I know works within that space to introduce that way and hopefully can get that client taken care of.
Paul Sian: Are you able to comment on the underwriting process of commercial loans compared to residential. Is there a big difference in that process? 
Angie Hoffman: So, yes and no. I know we touch on it already a little bit. One of the biggest differences is obviously we’re gonna look at the actual collateral in a very different way, especially on the investment real estate side. When you’re looking at investment real estate, the factors that the net operating income as well as the cash flow of the property become factors. Whereas, when you’re buying a home, obviously it’s a lot more about the loan to value of the property. However on the other side of that, if we are looking at a property that’s gonna be owner occupied by a small to medium business. It becomes a lot more about the loan-to-value as well. So, it can depend upon the situation.
Paul Sian: Okay. How important is the person’s experience when they come to loan, get a loan for you. If it’s a new first-time investor looking at multi families versus somebody who’s already got five to ten units and then either self-managing or running it for a couple years.
Angie Hoffman: I mean, generally speaking, if you have somebody brand new, one of the biggest things is if you’re not familiar in the scope. You don’t have experience, you gonna be partnering  potentially with a property management company or somebody else who is maybe a partnership within the LLC or the property that you’re buying that has the experience. Just being able to show you may not have previous experience in this but you are partnering with a property management company that has historical success in these properties. You’re partnering with somebody, for instance, who has historical success in the properties.
Paul Sian: So, yeah boils down to your team then. What you’re bringing to the team. What kind of document requirements are there to start a commercial loan process with US bank?
Angie Hoffman: Generally speaking, in every situation is different, every request is different, client is different. But it’s typically going to be two to three years of taxes, personal and business, personal financial statements pretty standard as well. If it’s a purchase, we’re gonna want to see a purchase agreement or understand the purchase agreement as well. As you’re gonna want to have financials whether it’s profit loss or the rent rolls preferably a Schedule E or 8852 from the client. Showing what the historical trends of that property of have been. That’s where we really try and partner with our clients of understanding their portfolios, understanding what purchase they’re trying to make. So, that, does it fit, and is there anything we see because we see them on a very regular basis that. Maybe we need to discuss or let the client know that we are suggesting maybe prying a little bit more information.
Paul Sian: How important is ones credit score when they come to apply for loan with you?
Angie Hoffman: It is a factor, I mean. In any type of just like the traditional mortgage, it is gonna be a factor. But there are so many different factors that, it’s only one of many.
Paul Sian: One of the important things when it comes to purchasing real estate is I always tell the buyers that have a pre-approval letter ready. Is there something similar in the commercial loans place? A pre-approval letter, pre-qualification letter. Just something that says, somebody sat down with you, they started the initial process. They’ve got access to certain amount that they can borrow to purchase this property. Do you have something like that?
Angie Hoffman: We do. So, on the commercial side it’s gonna be called a letter of interest, and it basically lays out that we are working with a client. We have a price range or up to a price range that we’re looking for with the client, and depending upon the collateral. We are looking to work with him on the financing, again depending upon what the collateral is, and then we also have once we’ve actually maybe gone through a more official process of underwriting and submitted an actual financial package. We do have, depending again on what the financing contingency is for that client. 
We do have a letter of commitment, which lays out that there is an approval but it goes through all of the conditions as well like your appraisal certain things like that, that we’re gonna have to clear.
Paul Sian: Okay. How long does that process take? If you are writing an offer today for a client, and then usually you have to write in how many days we’re gonna close in. 30 days, 40 to 45 days. I know conventional, it’s usually a little quicker, a little easier. So, we can do it in 30 days or so. I mean, what would you recommend for a commercial loan?
Angie Hoffman: I think 45 days is very practical. One of the biggest things that I always talk about with my clients is that 45 days really is incumbent of me having a full financial package, meaning those two years of tax returns. The financials, I spoke about from the client that you’re purchasing, and or if you’re refinancing. To me, having that full financial package is really the key and then, again from there it’s gonna be some of the factors of the appraisal as well as the title work that would go along with it. But generally speaking, 45 days to close is pretty.
Paul Sian: Reasonable.
Angie Hoffman: Yes.
Paul Sian: You mentioned the documents that was my blog article documents for the conventional mortgage process. You mentioned W2s, 1040, tax returns, that is pretty similar the document requirements for commercial loans that it is for residential space?
Angie Hoffman: Yes. It’s very similar. With the PFS is gonna be one of the biggest as well as the two years of tax returns. Potentially three years depending upon, again the request size. Like you said, I mean, if they’re a W2 income type of employee, then we may need additional pay stubs. like I said, for any client, it could be very different depending again on what their history is. If they’re a business owner, then we may mean some more details but generally speaking, again it would be two to three years of personal business has returns, personal financial statement, and potentially obviously purchase agreement or additional documentation from that side.
Paul Sian: Okay. When it comes to partnership, people coming together, those documents from everybody. Correct?
Angie Hoffman: Correct. So, depending on what the ownership structure is. Generally, if somebody’s over 20% ownership within the property, then we’re going to need that financial information from them as well.
Paul Sian: Okay. I know with the conventional space. Lending into an LLC is generally impossible. Most lenders will not allow conventional borrowers to use an LLC. How does that work on the commercial side?
Angie Hoffman: The vast majority of the lending that I do is going to be through an LLC in a holding company. The clients are still a personal guarantor but the lending itself in the title is all within the LLC.
Paul Sian: Is it a requirement in LLC or is it an option for the buyer?
Angie Hoffman: It’s an option. I mean, one that again depending from an attorney’s perspective, if you’re talking about liability. It may be a best-case scenario to have an LLC with that property. But we always reference stuff talk to your attorney about what makes sense for you.
Paul Sian: How much, do you have any minimum loan requirements and your maximum loan requirement?  
Angie Hoffman: Up to ten million on the investment real estate side, and then once it’s beyond that, we do have a commercial group that we would work with a real estate group as well as our middle marker group that would potentially be involved. As far as minimum typically, again if it’s under 2,50,000. It’s still something that we would do. It just, we pull in a different partner to work with us on that too, because it kind of goes into a little bit different of a space.
Paul Sian: Is there, under 250,000$ or is there a lower minimum. I know some conventional lenders won’t touch anything fifty thousand and under.
Angie Hoffman: It’s pretty common. Yes, under fifty thousand is gonna be a little bit more difficult. 
Paul Sian: 50,000 to 2,50,000, and above that.
Angie Hoffman: But keep in mind too. I mean, if you have properties itself. It may be again, you see this more with the single-family home portfolios. You may have multiple properties that are under fifty thousand. But we’re looking at the entirety of the portfolio, makes a little bit different of a scenario. I would caution that anything that somebody is looking at from the perspective of either total lending amount or even individual property. We’re happy to take a look at it, have an understanding of what you’re looking to do, and if for some reason it’s not something that is in our world necessarily. Again, from an internal and external standpoint. We typically have somebody who I can contact.
Paul Sian: Discussing interest rates from general perspective, everybody’s situation is different and unique. But in terms of paying more, having a lower LTV, 60% LTV rather than 80%. People get themselves a better interest rate or is it generally, can we same and more just depending on credit and history.
Angie Hoffman: So, from an interest rate standpoint, the commercial side is a little bit different. Then maybe the mortgage or lines of credit side, then you then you generally see. Ours is based off of what banks cost the funds are, and then there is a spread that is on top of that. That’s where you get the percent from. Right now, cost of funds are pretty minimal. So, interest rates are extremely competitive. But from that perspective, it doesn’t necessarily factor in the actual loan it saw or the guarantor itself or the property itself.
Paul Sian: So, there’s some risk-based consideration towards interest rates. I guess a little higher risk project is that something you would price a little higher in the interest rate or generally that it’s not considered as much?
Angie Hoffman: No. That’s not considered as much, generally.
Paul Sian: Okay. Great. That’s all the questions I have for you today Angie. Did you have any final thoughts to share with the group?
Angie Hoffman: Sure. One thing I would say is if anybody has any questions about property specific, cash flow, if this property may fit into their portfolio or something that we would look to land up to 80%.I’m happy to partner with anybody on that side as well, and be resource for them. On top of that, I did want to mention that obviously US Bank is across the country. That gives us the ability even, if I’m your contact in Cincinnati to lend out-of-state borrowers.
I’ve worked with quite a few clients obviously from California that are buying in Cincinnati as well Chicago. So, those are people that I’ve worked with quite frequently as well.
Paul Sian: That is perfect. I’ve got a number of out of state clients to. That is one of the biggest challenges that I’ve faced with some local lenders is that they don’t lend to out of state. That’s a great ability to have.
Angie Hoffman: So, the key with in that too is just as I want to mention too. I mean, anytime that scenario comes up. We are happy to discuss it. One of the biggest factors with out-of-state lenders is that we do look for them to be within US bank footprint. So, we are very much on the west coast and Portland, all of those areas. If they’re somewhere you’re not familiar, if we’re within that area, please reach out. Let me know, and I’m happy to take a look.
Paul Sian: Great. Thank you again. I will leave your contact information on my blog post once it gets published live. Thanks again for being on the podcast.
Angie Hoffman: Thanks for having me. 

The Dos and Don’ts of Borrowing Money

Taking on debt is a thorny subject. Signing on an affordable mortgage is one thing. Racking up credit card debt on unnecessary purchases? Quite another. Any time you borrow money, you put your finances at risk. That’s why it’s important to … Continue reading →

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