Explanation of Hard Money to Conventional Loan

[Brian Anderson]

Can someone explain how you go from a hard money loan to a conventional? I found 2 shells next door to each other that need complete rehab for $30k and 70-80k in repair. This property will be considered commercial real estate. I have a company willing to sign a 5yr lease at 4k a month before the start of repairs and purchasing the shells. I am shopping hard money now but looks like I should be able to get around 15% interest only 2/1 in my area. I see a lot of the posts say banks will loan 70% LTV. This property set should appraise for approx $250k. Does this mean I am able to borrow up to 175k? I will only need 110k (30k + 80kmax) to pay my hard money guy off. Does this mean I will get a loan from the bank for 110k at an investors interest rate with a potential for a possible 5yr ARM and shorter amortization? Any guidance would be very helpful

[Bill Gulley]

I suggest you go to the bank first, they may do the deal, but at least get qualified and see what kind of title seasoning they require and terms, then put the hard money in knowing where you'll need to be down the road. Taking hard money without knowing the end game or exit spells failure. :)