Delayed finance out of hard money within 2 months

[Phil Collett]

Hello, I was wondering if anybody knows if I can pay off hard money and then still get delayed finance on a rental property? 

I used cash for some down and prepaying construction so it would be on the hud, but used hard money on the rest at 75% of arv.

I had some money out as private money, so when I found a property I used hard money because it was easy and just to try out that experience. so the renovation is done, got a tenant in place but cash flow is a little tighter that I thought so now finance rate long term becomes more important. I have quotes of 6 to 6.3 on a 30 year from 3 banks which I can lock in today, but bofa will be around 5.5 but I need 4 months for a refi of the hard money amount. I am just under 2 months and the hard money is interest only at 10% so 2 months isn’t that long. Maybe 1 fed rate hike of .25% between then and now (80% chance according to CNBC today)

[Andrew Postell]

@Phil Collett you are experiencing a very common element in the investment world.  We preach to NOT work with large lenders because they are very difficult to work with on investment properties.  Investment properties foreclose at a higher rate than primary homes.  That means they are more risky to me.  So if I'm a bank, and I know that, and I'm publicly traded, and all my stockholders know that....then I had better limit my risk or it might cause my stock price to drop!  And this is the absolute reason why we don't work with large banks.  I don't want to sound like I'm coming down on them hard...this is a business decision.  So our business decision is that we need to work with banks that are flexible with investors.  Rate is important...but if you can't close then who cares what the rate is.  Here's what I would recommend you to ask your lenders when you interview them:

Questions for Lenders

1. When do you start using rental income to help me qualify? (the answer needs to be immediately)
2. How long do you need me to be on title to refinance? (this is important if you do need a short term loan to purchase then refinance out - and the answer should be 1 day...very important that it is 1 day on title is all that is needed to refinance.  if they can't do 1 day, then go somewhere else)
3. What is my minimum down payment required? (not so important but if they only require 15% down on a single family home that is usually a good sign that you are working with a flexible lender)
4. Can I change title to my LLC?
5. Do you sell your mortgages?
6. What is your loan minimum?
7. Can you explain to me what your reserve requirements are?

Remember, you are the customer.  They need to earn YOUR business.  Not the other way around.  Feel free to tag me if you have any other questions.  Thanks!