Lender to finance fix and rent multifamily

[Tanu Soni]

Hi,

I am a new investor ,looking to buy my first multifamily(2-4 units) for renting. Most properties need some or full rehab . I got pre-approved with a lender but they don't do fixer upper loan . What are my options? 

Thanks

Tanu

[Michael Kinsella]

Hi Tanu,

You'll likely just need to speak with more lenders, and be sure to inform them up front of your renovation plans.

The two issues you're likely to encounter with lenders are,

1) Your lack of experience. This becomes particularly relevant when you aim to tackle larger rehab projects.

2) The size/scope of the rehab. Some, but not all lenders will take issue of this, particularly if the rehab budget is quite large compared to the as-is value or purchase price of the property.

Below are some ideas for finding more lenders to speak with;

1) Start to develop some local bank relationships. They may not be able to help in this instance due to the nature of the project, but it doesn't hurt to begin to cultivate those relationships early on.

2) Google "Multifamily value-add lenders Detroit", or something similar to pull search results.

3) Use BiggerPockets. Click on the Network tab on the top navigation menu, then Hard Money Lenders --> Filter by state (MI).

4) Attend local real estate investor meet-ups/REIA events. You can network with other real estate investors who may have referrals, and also lender reps.

Best of luck,

Michael