Strategic financing question

[Nicholas Weckstein]

I have a 7 unit complex under contract. 2 units are rented, 4 are in move in condition, 1 needs rehab. my question is, when im dealing with a bank/lender, are they able to use fair market projected rents (just like I did) when underwriting and evaluating the property for financing?  also I mentioned that its a 7 unit complex, it consists of 2 separate buildings, 3 separate PIN numbers (10 car parking lot and 2 houses)

my thought is that if for whatever reason they can't or wont use projected rental income on the building I will have to just find a HML to fund the deal while I get the units rented then circle back and apply for more long term financing

any thoughts or recommendations on this situation or a hard money lender who deals in PA

[Jeff S.]

It’s very easy to say hard money here but I don’t think this is your best option, @Nicholas Weckstein. When the time comes, there is no guarantee you will be able to refinance out of your hard money loan or at least with acceptable terms. No one can tell the future. In fact, I'd be very leery of any HML who would finance you now without a written assurance of some sort that you are already pre-approved for the refinance.

It’s much safe for you to find a commercial lender who will provide your bridge financing now with an automatic conversion to a longer-term loan. This will be much cheaper for you and much safer for both you and your potential lender.