Commercial Lenders - Seasoning Period for New Build Multi Family?

[Ryan Weimer]

I am doing a 12 unit multi family new build apartments in Boise Idaho - The numbers are so good I'm using essentially a hard money lender to fund it because I can get 18% down (funding land acquisition and full construction costs).

The estimated time to complete the build is about 4 months. I am giving myself 6 as a buffer.  The units will be pre-leased so renters can move in immediately upon completion.  My question is - can I refi to a regular commercial loan once all the units are done and rented around month 7 or 8?  Or do I need to wait until the property is fully rented for 6 months seasoning aka a net 12 months from start of project?  Trying to estimate my holding costs here on the hard money loan.
Appreciate the help

[Stephanie P.]

@Ryan Weimer

Sounds like a great project.  You would want to try local banks and credit unions first.  They would probably love to talk to you about providing the end financing for a 12 unit, 100% leased, apartment building.

A couple of things I noticed in the thread that I disagree with.  You are not buying the property in cash or essentially in cash.  There's a lien on the property to be paid off and most lenders will look at it differently than if you paid with your own money.  Most hard money lenders (all of the ones I know) do not have prepayment penalties.  They may make you keep the loan for a minimum of 3 months or so, but you're well past that by the time the property is stabilized.

Like I said, try the local banks.  If you're not bankable, then definitely find a broker here on BP that does small balance commercial lending and they'll get your deal done.

Congratulations on your success

Stephanie