Hard Money Limits @ $100,000 due to Covid-19

[Valentine Antony]

Hi BP folks,

Just wondering if others are getting feedback from HM lenders you work with that are tightening up on their funding criteria. I target properties under $100,000 as a buy and hold investor. I have not reached out to every HM lender (I am doing that now), but wanted to check in and see what others are seeing on the ground. If that becomes a standard, I will be relaying more on my private lenders and targeting multi family properties much more! Cheers and curious what others are seeing.   

[John Collins]

Originally posted by @Valentine Antony:

Yes! After about 3 months turn around, rented and refi to conventional.

 Can you explain the exact process and % terms on your HM loan, then what you get on the conventional loan?

Yes, anytime markets become less liquid and are faced with uncertainty banks are going to tighten up. Right now we're dealing with virus uncertainty, but in the next 3-6 months we are dealing with economic unemployment and quite a few businesses won't make it out to the other end so keep looking at new, creative methods of financing. Banks are told to be skeptical and the transition from refinancing to conventional may be on worse terms (for the borrower) than before.