All Forum Posts by: Dennis Muno

I have 16-unit apartment building in Mississippi (8-units in each building). Both of these buildings are in the same parcel. I purchased this property with hard money lending to close the transaction 2 weeks back. Now I am looking to use loan programs for financing this. When I am reaching out to few lenders, either I am hearing that long term rental loan isn't there for > 8-10 units OR can't do the loan because the loan amount is lesser. So I am kind of stuck with what financing options do I have that should help with this scenario.

Any thoughts, connections or suggestions of what loan programs can be availed or how to go about it, would be appreciated.

Hello Arjit,

So are you looking for a loan to rehab the property? It sounds like you already have purchased the property a few weeks ago. Or are you looking for a long term loan?

If to rehab, bridge financing would be the way to go.

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congratulations on your progress

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Quote from @Byron Paille:

I have an opportunity to buy 5 homes as a package deal. Agreed to 365k on a 440k price. 2 with renters, 1 ready to rent 2 needs final finishing to rent.

How do I get this financed. I do not want to do 5 closing on 5 houses. Only commercial lender I know only does ARM rates.

What lender should I go to? Any one done deals like this?

Hello Byron,

I think a blanket /portfolio loan would be the way to go. Then you don't have to buy the 5 homes individually plus pay 5 different closing costs

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Dallas, Texas

Quote from @Chris Thomas:

I am looking to expand my portfolio, but am short on funds and want to start using other peoples money. Where/who can I go to for down payment and reserves to qualify for hard money and DSCR loans. And once financing is secured how are contracts written or are LLCs created for each partnership with % ownership. Just trying to learn how involving partners is done.

Hello Chris,
So you'll need to find a private money lender to work with. Your terms and contract details will very from private lender to private lender.
Also, the type of project you want to do, your FICO, experience, length of project, etc will factor into the rate and terms every private lender is willing to give you.
So for loans like this, there's usually a guarantor. Sometimes some lenders require anyone in the LLC with 20% + membership to be part of the application.

Terms, conditions, requirements will vary from private lender to private lender.

Thanks!

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Quote from @Paul Magda:

Hello,

I have a 0.5 acre parcel of bare land that I am currently looking to develop. All paid off, no loan on the land and its located in Roseville CA.

I plan on developing a RCFE home where I can run the business..I am currently in the research stage on how I can fund this development with little/no money out of pocket.

Are DSCR loans even available for new builds/developments like this? If so how are the limits calculated? An RCFE is a very profitable business and can produce some great cashflow. Will this effect the limits?

Are there better loan options/products available for this?

Any input will be greatly appreciated.

Hello Paul,

Even better that the land is paid off. So DSCR loans would not be eligible for what you are trying to do. Bridge interest only loans/private money would be the way to go.

The Bridge loan funding amount would usually for this scenario be up to 65% of the ARV of the completed project for you to do your project if you qualify. You'd get money for developing the land(if need be) and then putting up the building.

Lenders would want to know your experience(investing) and your post completion strategy(keep, sell, etc). They'll also check to see if you can make the monthly interest only payments. Generally, loans like these have a 12-18 months term, with extensions usually possible for a cost. Your permits, environmental, zoning, other legal documents will be asked during the funding process.

A bridge loan would allow you to do this with interest only payments during the terms period and then before/once the term is over you'll need to refinance the bridge financing to pay off the bridge loan.

Bridge seems the way to go. DSCR wouldn't work for this project.

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Quote from @Caleb Wilson:

I have a client who is looking to put an offer in on a residential property listed at $500k. However, she currently has a home and would need to sell her home OR provide ~$325k down in order to make sure she can afford both payments until she is able to sell her current home. The positive side is that her current home will probably be listed for ~$575k. Does anyone have any recommendations/experience with Hard Money Lenders/Bridge Loans? I'd greatly appreciate any and all help!

Hello Caleb,

So does your client have the $325K? Is she looking to buy this new home in addition to her current home? How does she plan on getting the funds for downpayment + closing costs for the second home? Will she be selling her home(sounds like it) or taking equity out to buy her second home?

Bridge/hard money are usually used for investment properties buy and rehab/ construction.(Generally)

However, some lenders(a few) do a short term buy before you sell bridge loan that will allow your client to buy their new home while they wait for the old home to be sold.

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Quote from @Henry Lazerow:

I am looking at a 4 unit on the northside of chicago *class B area where the tenants need eviction and we cannot go inside for appraisal. Does anyone know any lenders who can lend on something like this? My partner and I are strong borrowers we both have good income and pretty perfect 740+ credit as well as rehab experience.

Hello Henry,

I think this mightt be doable with some hard money lenders. The tenants in property may cause some bumps in financing but I think you may get some hard money lenders who will help you. A 740 FICO from both you and your partner is a good start with hard money lenders. I think it'll depend on which hard money lender you talk to and their options.

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Quote from @Andrew Wilfong:

Hello,

My wife and I live in Pennsylvania.

We’re in the market for a plot of land with a home that is livable or raw land that we can later build on.

Recently we found the land that was exactly what we want, however there is a home on the property.

The home on the property isn’t livable because there’s no HVAC system, there is damage to the roof, and the foundation is not in working order, not to mention the electrical issues and water damage in the home.

The sellers are trying to accept cash only offers because of the condition and are selling as home and land, but have not received any offers and are becoming open to a buyer going through the bank.

Because the home isn’t livable, how could this property be financed so that, we as the buyers, could completely gut and renovate the home?

Because of the HVAC alone, a traditional mortgage doesn’t seem to be an option.

Is this possible and what would the sellers/buyers need to do in order to be able to do this?

Thanks!

Hello Andrew,

If you are buying the property for a primary residence, an FHA 203k or conventional homestyle may be an option for you.

If you are buying for investment now or in the future, a bridge interest loan option may be the option for you.Private money too may be an option. Lenders will want to know what you plan to do with the loan and after the loan

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Quote from @Olga Daisel:

I need help to get best case on my financial situation. I have a piece of land I want to use to build a house and sell it. I have approved plans and ready to start. The cost of land is closer to 1mil now and there is no lien on it. The problem is I need money to build a house, and I prefer not to pay interest monthly but rather a balloon payment in the end of life of the mortgage. I need to draw about 700k. Any suggestions if such a structure exists? To summarize:

- construction loan

- interest is payed at the end

Hello Olga,

It's great that you have bought the land already with no lien on it. That will make your financing a little easier. A bridge interest loan can be used from lenders you talk to who can do it. Monthly payments will be usually interest only with terms of 12-18 months. You pay monthly, interest only and then at the end of the period you'll need to either sell to pay the principal or refinance to pay off the loan.

This will give you money to build the house and then sell the property. Since you are looking to do construction, your experience will be asked?

How many projects/investment properties have you held, sold, fixed and held, fixed and flipped have you done in the last 3 years with your name on title?

If you do get a bridge, usually the financing will be based on your budget and or the post construction value of the property. If you are able to complete the property construction and get enough after selling the property, you then can use the proceeds of the sale to payoff the hard money loan in full and keep the remainder. Overly simplified, but this is a way for you to proceed.

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Quote from @Michael L.:

What's up BP Fam, I hope all are well🌞. Quick question; if you have a property that is paid off, can you still get a Heloc on that property to obtain an investment property or is there a better alternative? Proper thank you's for all assistance.

Hello Michael,

So generally lenders(most) won't do a HELOC on an investment property. Some may do a second position equity loan if the equity justifies(in your case it does if the lender will lend, since property is paid off).

Otherwise, your other option may be a DSCR cashout refinance on your property. Most lenders do up to 75% LTV for a cashout refi although very very few will do an 80% LTV but with higher loan pricing

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All Forum Posts by: Dennis Muno

Dennis Muno has started 1 posts and replied 324 times.

Post: Financing 16-unit building in Mississippi

Post: Small multi-family (2-4 units) other investment in Tampa

Post: Have package deal for 5 home, need financing

Post: How to Find Private Money/Structure Terms and contracts

Post: DSCR loan to develop an RCFE (Residential Care Facility for the Elderly)

Post: Home to Sell Contingency or Bridge Loan

Post: Hard money lender for a property with tenants needing eviction?

Post: Financing Land with a Home that Isn’t Able to Be Lived In

Post: Help on construction loan structure needed

Post: Heloc or something else🤔?