Financing in Las Vegas
I use Wells Fargo in Las Vegas for our Nevada real estate entity. Their online ease of use and level of customer service are exceptional. My personal banker is Giovanni Anacta of the business banking division. Giovanni helped me set up my business checking account and introduced me to a commercial lending officer as well as a mortgage loan officer. I felt like the red carpet was rolled out for us. Contact info: firstname.lastname@example.org (702) 382-8722. 801 South Rancho Lane C-3, Las Vegas, NV 89106. [Wells Fargo has now extended our business entity a business line of credit and credit cards! Maybe that doesn’t sound exciting, but it really is a great program for building business credit and potential funds for investing needs.]
One avenue that I have yet to check out is Aloha Pacific Credit Union. Big banks are very limiting to investors like me. I have been told to try small community banks instead. Aloha Pacific now has a branch in Vegas so I plan to open an account at a branch here in Hawaii and start establishing a relationship so they will be happy to lend me money in Vegas for properties in Vegas.
Our realtor Martin Fajardo wears many hats and has renewed his mortgage broker license! Martin is our all-in-one in Vegas. Of course he takes care of Uncle and me because we are mutually beneficial for each other, but more than that, Martin is the best of the best. I am almost hesitant to leave his contact info because he is so good at what he does, and is always busy for his good clients. (Okay, okay, I am being selfish..) His email is email@example.com – he might not respond to you right away, or at all since he doesn’t know you, but if you are serious about investing in Las Vegas, keep trying or contact Aunty.
Vegas is still very much a “cash is king” place when it comes to buying deals. Getting financing is tough, but do-able. Getting a 70-75% LTV (loan to value) loan is ideal. Also, most banks won’t lend you money if you have 4 or more outstanding loans. Getting a 70-75% LTV loan after you’ve paid cash for a property is really tough. One way around this is to purchase the property in cash, then get a HELOC on it. I have done this but run into very stingy banks, and the LTV was only 55%. Still, 55% is better than having to maintain 100% of the equity and tie up your cash.
[In 2010, it got pretty tough to get loans from conventional sources such as banks. However, my first choice for financing would still be banks because they have the lowest rates, though also the most hoops, and it takes longer to get qualified – unless you have very little debt and stellar credit ratings (not me).]
Many financial celebrities will tell you to pay off all your debts with whatever cash you have so you can have a debt-free life. That is Grandpa economics (from Jeff Brown of BawldGuyTalking). What worked for Grandpa doesn’t work anymore. Robert and Kim Kiyosaki talk about knowing the difference between good debt and bad debt. Pay off your bad debt, grab as much good debt as you can.
If you can’t get a loan from the bank, you need to get creative. Aunty is not in the creative stage of the game yet. Instead, I am still like the turtle, plodding along, slow but steady. There are many mentors out there that can teach the no money down, creative financing deals – and if you are more like the rabbit, that may be the path you might want to consider. Just be sure to run the numbers, and have an exit strategy just in case.