Hard Money Lender under personal name

[Ajeng (AJ) S.]

Hello all, 

I have been trying to secure a buy and rehab rental property for a couple of weeks now, it has been difficult as I am using conventional loan. We have been outbid by cash buyers. I'm trying to find cash,I've reached out to HMls Most only lends to an LLC. No option of private lending at the moment. I planned to do delayed financing, buy the house in cash via HML and convert HML to conventional loan under my name. Is that doable? I do have an LLC but prefers my long term loan under my personal name because the rate is 2.75. Does anyone know any lender that lends to individuals? Property is in Baltimore, MD. 85-90k homes.

Thank you 

[Ned Carey]

@Ajeng (AJ) S.There are at least four issues here. One, is this a personal loan or a commercial loan? Will the property be held in an LLC? Will you live in the property? Does the property need repairs?

All these affect who and how you can finance a property.

1. Is the loan for a personal purpose like buying a property to live in? If it is then there are MUCH tougher requirements a lender much meet. So Hard Money lenders do not do Personal loans. Most but not necessarily all want the property to be in an LLC, because then it is clear that it is a commercial loan.
   
2. Will the property be in an LLC? If it will almost no traditional home lender will make the loan. The secondary market buys loans from people not from LLCs. Fannie May, Freddie Mac etc. were founded to help people buy homes not to help businesses.
3. Will you live in the property. Go back to answer number one. Even if held in an LLC, if you live there, lenders would have to comply with Homeowner requirements - therefore no Hard Money lenders.
   
4. Does the property need repairs? Most traditional loans are designed for properties in good condition. While a traditional lender may loan to you for a property that needs repairs ti will be a specialized loan. Those loans are not near as common. One is called a 203K loan. Again traditional lenders any require you to live in the property to get any type of construction loan.
   

Now Buying in an LLC and putting the loan in your own name is not an answer. LLC or not you will be guaranteeing the loan.

Now there is a third choice of hybrid lenders. Companies Like Lima One, or Dominion Financial (Dominion is a Baltimore Company) are companies set up to loan to investors and closer to traditional rates.