Need Advice - Hard Money Lender for 1st property - 4plex

[Alex Khojainov]

Hi BP, thanks for clicking on this thread, hopefully I can get some advice on this deal.

I found a nice 4-plex in a C+/B- area in Washington DC that is being gentrified. 1BR 1 BA in each unit, renovations have begun (demolition has been completed, new drywall (unfinished) is up, new windows are installed). I'd say the property is 50% complete, need to finish drywall, cabinets, sand and stain flooring.

I'm 25, have 4 years of residential construction experience, all necessary tools and truck from working for a contractor. I am comfortable with the scope of the that needs to be done and have other 'staff' that I can bring on to assist with completion.

My main issue is financing. I have about $20K in a buisiness account, another $25K available in credit cards. No debt. I currently rent and subsidize my rent by renting out the parking spots behind our house so my main expense is about $300 a month in rent.

I went to a bank to see about a mortgage, but since I've been paid as a 1099 at my previous job I can't use my tax returns to get conventional financing.

Should I look for a hard money lender? I found several that offer 6-month, 12-month and 18-month balloon notes for multi-unit/income producing properties in the area, up to 60% LTV of ARV.

I found a comp. 5 unit building selling for $425,000.

Asking price is $199,000
1BR/1BA units rent for $990 in the area.

I want to get an HML for the ARV, fill the units, and then re-fi with a conventional lender.

At 100% occupancy the property is chugging out about 4k a month, which would be enough to cover the $1200 mortgage on a conventional loan.

Am I going to run into the same problem showing proof of income when I go to refi? What do you guys think about this deal? Any and all advice would be greatly appreciated. DC RE is coming up and I know it's time to take the plunge. Thanks in advance!