Buying Multi Unit to Hold with Hard Money?

[Tom La Rosa]

has anybody done it ? 

I see a Norris Group buy and hold product that I am interested in.

any thoughts ?

[Phillip Syrios]

Originally posted by @Tom La Rosa:

@Phillip Syrios

Thanks for replying. The goal is not to lose money.

I see a hard money loan that converts to 9% after a while ( 5 year term ). Its not a good interest rate, but it may be a way into a multi unit with nothing out of pocket. 

I wonder if you cash cash flow with a 9% loan ? Then refinance to a conventional loan later ?

It may be crazy, but Im trying to get creative and make something happen.

That's not too crazy, you can make stuff cash flow at 9%. We actually use the exact same business model in the Kansas City market. We look to get 9% interest  only money to 100% finance the deal and repairs and then have a decent  cash flow. Then we refinance it at a lower interest rate with traditional financing and pull out all the investors money.

The three keys to this model working is to have a high rent to cost ratio, have great Managment and get into the deals cheap enough that you can refinance your investor out with a 70% LTV loan a year or two down the road.