All Forum Posts by: Dennis Muno

 Hello John,

So multifamily investment property HELOCs are usually hard to come by. However, investment home equity loans are a way to get equity out of your property to do this. They will be in second position to your first lien loan on your property

Hello Michael,

So how long ago did you buy the property? What kind of loan on the 8 unit property do you have? It should most likely be a commercial loan. Depending on the kind of loan there is usually a period before you can do a cashout refinance.

Is the LOC for $500K on another investment property?

How much cash you can pull will depend on how much the liens(loan payoff) on the 8 unit property are vs the $1.7M property. Your FICO will matter, as well as the cashflow on the 8 unit property.

 Loans like that are possible. However, keep in mind pricing from every lender is different so you'll have to compare them to get the pricing that will be best for you

 Hello Ben,

The only way to know would be to check a couple of reviews and perhaps call a couple of hard money lenders to see who has the best rate, ARV, LTV, highest LTC.

Keep in mind: everyone's pricing will be different. Things like your FICO, experience level, cash on hand, budget, ARV, if working alone/with a partner, if closing the loan in LLC, are what will determine your pricing with every lender.

So, it isn't only about who does the best rates, ARV, LTV. Your financials will determine your pricing. So call a couple of lenders, give them a call, give them your financials when they ask, and then get pricing.

 So, most of the time in the asking phase your credit isn't pulled. You tell them what your credit is. However, once you choose to apply for the hard money loan, your credit will be pulled. If you are shopping multiple hard money lenders, ask them if a soft pull initially works for you. Once you find a lender you want to go all in then they can do the hard pull.

Keep in mind: if you ever find a lender who won't check your credit for a hard money loan, your interest rate(even though usually interest only for hard money) will be pretty high

 Like everyone has said here, normally 0.5-1%. Since the loan amount is usually larger normally it isn't more than 1% per lender involved in the deal. If there is say a broker and a lender usually they share the fee for origination

 For a construction(or bridge) loan, most lenders would want 2-3 projects(buy, rehab, hold/sell, construction) experience usually in the last 3 years minimum. Some may consider your experience over the last 5 years. All in all, your experience(especially construction experience) with you(or with a partner's name) on title will matter the most.

Do you have a budget? That will influence your how much you get in funds for buying the land and for construction, as well as how much you need to put down for closing costs.

If you don't have the experience you could partner up with someone with experience whose also got cash to help you with this deal. In my mind and experience, it even strengthens your application and chances of getting good financing options.

How much you will need to come up with will depend on the type of financing. 

1. Bridge financing(interest only):For construction loans, you could do a bridge solution to help you buy the land and do the vertical construction(get the land surface engineered and developed for putting up the apartment buildings) and then horizontal- downpayment will vary. Usually, if you qualify you could get up to 75% of the value post construction for funding to do the project but in stages.So there won't always per se be a hard downpayment. Usually for these kind of deals your cash reserves will be looked at as well as proof of income enough to make monthly interest only payments. The amount funded(usually based on loan to value or loan to cost-usually up to 75 post construction value or cost) covers for the entire project. You may have to pay some costs for building out of your pocket. You may have to pay some costs associated with closing but generally for bridge financing a lot could be negotiated. Large scale funding for deals like this are usually negotiable so the amount you'll need to come up with will be negotiable with the lender and also per their guidelines.

2. Buying and Vertical only development financing, then horizontal later: While this wouldn't the most sense( have to apply for financing twice) some investors may want to get financing for a first stage and then financing for later. How much you'll need to bring to closing will depend on your budget, how much you get in funding and then things like title fees. 

All in all, unless you speak to a couple of lenders, the amount to close will be different. These type of loans for such projects are usually negotiable to an extent, which will vary your amount you need for downpayment and closing costs.

I know I've said a lot but I hope this helps

If your deal is good and you qualify, they may be willing to bend and relax some rules for you.

 Hello Kevin,

Not to be judgmental but your lender must calculate your cash to close and all that info. Letting you move closing date thrice(without a very legit reason) is not professional and speaks volumes of your lender. 

The investment properties you own: are they in your name or in an LLC? If in your name, that may be part of why your DTI is high. Did you write off a lot of income for the rental properties? If yes, your income in addition to your military income will be low.

For loans, there is your income and then income for calculations(based on guidelines)

Depending on the loan type, there are usually maximum DTI requirements

 Soft pulls are a way to proceed. Ask a lender to assist you with this

 Hello Sam,

So while it is not common due to the $ amount I am sure there are some hard money/ private lenders lenders who will assist you. Just keep in mind that for loan amounts under $100K fees may be a little higher to compensate for the low loan amount and risk