Refinancing

[Kareem Hyman]

Hello, I am reading an article entitled "How to Buy a Small Multi-Family Home" by Brandon Turner and in the article he said that he was purchasing a muilti family home for 90k  In order to finance the house he used a private money lender to give him the entire 90k which he had to pay back in a year. His plan was to refinance the home through the bank by doing this he said his monthly payments will drop significantly and. I am confused about why he would use a private money lender and the refinance the home. Is that to pay the private money lender back? and if that is the case why didn't he just get the loan from the bank in the first place and not use the private money lender.

https://www.biggerpockets.com/renewsblog/2013/04/09/how-to-buy-a-small-multifamily-property/

[Account Closed]

Private money is typically easier to acquire with no application process and larger funds are available in a system that would supply you the full construction budget up front. 

From the sound of it he would be able to purchase the home with private funds for 90k then depending on the appraisal refinance out and pay the private lender and still own the property and have monthly income stream. 

Banks can be a hassle hence why we work with private lenders 90% of the time!