Refinancing Hard Money to Commercial

[Lyric Todkill]

Greetings fellow investors,

My partner and I are working on our first duplex deal here in Houston. It’s already gutted and we would have about four months of rehab ahead of us. We have pre-approval for a hard money loan, but have concerns about how the refi will go. Here are some details.

ARV 330K

HML 260 @ 9.9% for 6 months

Refi as a commercial loan @ market (verbally around 5%)

My concern is the market rate. I once accidentally bought a lobster at dinner for $180 at market price, so I’m guy shy about getting into bed with a lender who can’t offer me a hard number. Is this normal for hard money lenders when converting to commercial loans and what are the main differences and pitfalls of a commercial loan vs a conventional loan? How difficult is it to take a hard money loan from one lender, but go elsewhere for the refinance? I’m also unclear as to why we weren’t able to secure a conventional loan in the first place.

Any insights into this?

Thanks everyone!

Best,

Lyric