Need Hard money Loan for Multifamily

[Cheri Crane]

I need a 300k loan to buy & rehab a duplex I want to add to my portfolio I am not going to live in it so I am looking for a landlord loan for an initial purchase & rehab. Need at least a yr to refinance as I want to us rental income to qualify.

Questions:

1. Has anyone used InTrust Funding (Bellevue Washington) or Core Vest Financing? What was your experience with initial funding, preapproval and payouts.

2. Does anyone know a private lender in Tacoma WA or surrounding area who will let landlords use a property with 100% equity in portfolio in lieu of down payment.

3. Any other advice is welcomed

Thanks in advance for input.

Cheri

[Nghi Le]

I've used Intrust before, as well as a couple dozen other hard money lenders. I know about CoreVest, but haven't specifically used them so I can't provide insight on their pros and cons. I can tell you that there isn't a perfect HML that can do everything you want (low rates, low points, long terms, low down payment, quick closing, easy docs, etc.) so you have to decide what's important to you. Intrust is on the higher end of cost and down payment, but they are fast and have the easiest and fastest draw process of any HML that I've seen. They might not be the best choice if you need to have a loan that runs for at least a year as they typically don't do 1-yr loans or will charge a very hefty fee for it. This is the case with a lot of the local HMLs as well.

You're essentially doing the BRRRR strategy here, which I usually recommend folks figuring out their refinance first before looking at hard money to buy it. Most BRRRR investors are more concerned about the 6-month cash-out seasoning period to use appraised value (as opposed to cost), but it looks like you're concerned about DTI and not being able to get a conventional loan at all. Have you already spoken to a mortgage officer about this and have them pre-qualify your income and debt? I'd definitely do that before anything else. Depending on how you set it up, you can use rental income right away, or you might need to show 1-2 years of tax returns.

If you can't get a conventional loan, you may be able to get a commercial loan for the refinance, depending on how well the duplex will cashflow after you fix it up. Some commercial lenders aren't keep on cash-outs on the refinance though, although I'm not sure how important that is to you or what your BRRRR goals are in general.

If you have a free and clear property, it's not hard to use the equity there as down payment for your purchase.  You can do it as a single cross-collateralized loan or in two separate loans - one to cash out the money you need for down payment, and one to buy the duplex you want.

Hope that's helpful.  Feel free to call/text/e-mail me if you wanted to dig a little deeper into your specific situation.