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Updated 10 months ago on . Most recent reply
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Is it hard to refinance a hard money loan into a mortgage?
Sorry if this isn't the correct sub to post in.
I'm a house flipper, I primarily do fix n flips and recently got an offer from my hard money lender where they want to fund me up 90% of the cost for multi family properties. I built a pretty solid relationship with them so I suppose thats why they're offering so high for me. However, this is simply just a fix n flip loan, not a DSCR loan. So, it'd be a 12 month of interest only payments before full principle is due.
So, my strategy is the following.. Similar to BRRR I believe. Use the hard money fix n flip loan to acquire the property, do necessary repairs(If any), and just refinance the property into a conventional mortgage. However, I wasn't sure if its difficult to refinance a fix n flip loan into a 20 or 30 year loan. The last thing I'd want is to be unable to refinance into a traditional mortgage, then i'd be stuck with a rather massive bill to pay at month 12 that'd i'd be unable to actually pay haha. I'd probably wanna cash out refinance, and only pull out the 10% I put into the building, but thats really it. Also, any specific lenders I should try to focus on? I've heard a lot about working with local banks.
Does my strategy make sense? Or is it unrealistic? Thanks!