I’m interested in hearing from anyone that has experience with creative financing and no money down deals. What questions should I be asking if you are a creative financing god?
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[{"id": "gn5dkuq", "text": "CHO", "replies": [], "depth": 1}, {"id": "gn8g50b", "text": "I structured a $50 million revolving guidance line of credit with terms that were: \n\n* 100% loan to purchase price\n\n* interest only (1st 6 months of interest paid in advance)\n\n* 30-day or less closing, but I could close these loans in 5 business days. \n\n* Property had to be an apartment or mixed use building with 5-30 apartments located in certain geographic areas. \n\n* Minimum GLOC funding was $2 million, maximum was $20million \n\n* Investor\u2019s average deposit balance with our bank couldn\u2019t drop below $35 million. These accounts weren\u2019t considered collateral. \n\n* Guidance Line of Credit was renewed every two years\n\nGuidance lines of credit are very interesting! The underwriting was approved on the market, this particular property type, and the investor when the guidance line was originally approved. \n\nThe investor typically would cure a lot of deferred maintenance, update vacant apartments, and get them rented out within 120-150 days after closing. At that point, we would get an appraisal. \n\nAfter six months under the GLOC, each individual property was refinanced for two years, interest only, 85% LTV, but usually only a small pay down was required because the property value increased. We structured these refinances as bridge loans, so no DSCR or cash flow requirements. \n\nThis whole situation involved an intense amount of trust on both sides. I had to trust this investor wasn\u2019t going to get stupid or sloppy. He had to trust I could close on time and not get all \u201cbankster weird\u201d as most bankers do.", "replies": [{"id": "gnbpjxx", "text": "&gt; I structured a $50 million revolving guidance line of credit with terms that were:   \n&gt;  \n&gt;100% loan to purchase price  \n&gt;  \n&gt;interest only (1st 6 months of interest paid in advance)  \n&gt;  \n&gt;30-day or less closing, but I could close these loans in 5 business days.  \n&gt;  \n&gt;Property had to be an apartment or mixed use building with 5-30 apartments located in certain geographic areas.  \n&gt;  \n&gt;Minimum GLOC funding was $2 million, maximum was $20million  \n&gt;  \n&gt;Investor\u2019s average deposit balance with our bank couldn\u2019t drop below $35 million. These accounts weren\u2019t considered collateral.  \n&gt;  \n&gt;Guidance Line of Credit was renewed every two years\n\nWill you marry me?", "replies": [{"id": "gnbts75", "text": "I\u2019d happily consider your proposal, but I\u2019m already married . . . to a former coworker . . . who also finds my deal structuring sexy.", "replies": [{"id": "gnbulyf", "text": "We could move to Utah.", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "gnmy9jg", "text": "The reality is (I\u2019m a lender) that barring some extremely extraordinary circumstances you\u2019re going to need to have some skin in the game.", "replies": [], "depth": 1}]