Hard money loan to buy multi family then refinance on conventiona

[Alfredo Aguirre]

Hello everyone, I currently found a great property ( 5 units ) but i do not have the 25% down payment required by my bank to get the loan, reason why i am considering a HML...

My question is , if i buy this property on a HML and then after 6 months i want to refinance with a conventional loan for 15 yrs, do I still have to pay the 25% down or how do this work?

[Andrew Beauchemin]

Are you able to increase the value of the property in those 6 months?  I would stay away from hard money if there is not a short-term significant value-add play.  

I would recommend finding a JV equity partner that has cash, experience, and is bankable.

To answer your question, yes, you will need to be able to support 20-30% of the assessed value at the refinance.  If you can force appreciation before the refinance (increasing rents, cap ex, etc.), then the added value goes toward your equity.