Refinancing rehab from hard money

[Rene Montelongo]

Hello all, needing advise here. I am finishing up rehab on duplex and looking to refinance out of hard money. Both sides will be rented out.  I am not getting the response from bankers that I expected. I am looking for 30 year refi with a local bank but all I am getting is 15-20 year offers, maybe 25. What am I missing. TIA.

[Scott Reynolds]

Most traditional banks only offer 15-20 year loans on investment properties. But if you look at direct lenders they offer more options. Many will only lend to an LLC and they will typically be at a higher rate. But they will lend on 30 year terms on investment properties. There are many options with these types of lenders as they don't have to conform to Fannie and Freddy guidelines. They also offer options like DSCR (debt service coverage ratio) that can really streamline the application process because all they are looking at is the income generated by the property allowing a specific spread above that required to pay for the properties expenses. Depending on the lender these often range between 1.2-1.3 in my experience.