Hard Money Loan Increase?

[Glen Fernandes]

I recently purchased a triplex under a HML. We recently received approved permits / drawings, which has resulted in scope increases (e.g. masonry, deck repair, framing) and cost over-runs by 20-25%.

How should I navigate a loan increase converstion with the HML? I can also cover the variance out-of-pocket if necessary.

[Mike Klarman]

If the loan is closed, there will be no loan increase.  If you added a contingency to the rehab then you can draw on that.  Everything else is out of pocket unfortunately.  Something else to consider is to wholesale out.  but a triplex I am guessing you want to hold so you'll have to eat these short term expenses and make it up long-term once appreciation and cashflow have increased.