All Forum Posts by: Donald Pierson

@Kelsey Jurewicz, yes, that would work.

Not sure if local Credit Union or Banks will provide a solution so a hard money lender is fine.  Especially if they are a little kind on interest rate ;o)

Hello, I am looking for short term financing for a fix and flip.  I need an additional $90k for closing costs.  

For my area New York (lower Hudson Valley), can any one recommend a lender than can finance $90k for 9 months with no payments for 9 months using my investment property (STR) as collateral?

Investment Property:

Fixed Interest Rate 4.25%

Mortgage Balance $364,088.24 (Mkt value $625k)

Principle & Interest $1,827.56

Tax & Ins $1,189.78

Monthly payment $3,017.34

My Middle Credit Score: 720

My Debt to Income: Under 20%

Good reserves

Any feedback and recommendations are greatly appreciated!

@Chris Davidson, thank you for taking the time to look into this deal and provide feedback.  Very helpful, I had not considered all the options you presented. Greatly appreciated!

Thank you, Mack! 

Really appreciate your insight and feedback. This deal only works because of its location (limited gated community) and scarcity of inventory at the lower price point.

I have good confidence during the "fix" process. I'm using the same GC I used last year to handle an extensive kitchen and lower level remodel of my 2,444 sqr ft investment property last year. They finished well ahead of time! That never happens. I'm also a PMP with 3 decades of project management experience. That helped a little.

Plan B. The numbers work out to refinance after 6 months to hold it as a long term rental. There are also zero rentals available in the community, so renting it out should not be a problem.

Now I just need guidance from the finance folks on the $110k I mentioned above.

Thanks again Mack, and for your kind vote of confidence!

For clarity, the seller is reducing the price from $1 mil to $725k.

TLDR: Fix & Flip (see BP report link View report). $725k (single family home; on MLS @ 1mil). I need $210 for closing. I'm using $100k of my own cash toward the total closing costs of $210k. For the remaining $110k can I get financing for 9 months with no payments for 9 months using my investment property (STR) as collateral?

Investment Property:

Fixed Interest Rate 4.25%

Mortgage Balance $364,088.24 (Mkt value $650k)

Principle & Interest $1,827.56

Tax & Ins $1,189.78

Monthly payment $3,017.34

My Middle Credit Score: 750

My Debt to Income: Under 20%

Good reserves

____________________________________________________________________________________________________________________

This is a fix and flip. I am confident the estimated ARV is strong (it may in fact be a little conservative). The $300k repair costs are based on a very recent/thorough inspection report and my GC's scope of work. The property is surrounded by multimillion dollar estates/mansions. It is located in an exclusive gated community with little to no single family home inventory left. It is also quite challenging to find land and initiate new construction.

IF we are able to renovate AND sell the property within 6 months life is good (not likely). However, I am trying to create an exit plan if we are not able to sell within 6 months (not likely). Since this is my first fix and flip financing is at a premium (see terms below). I'm fine with that because of the projected ARV.

Bridge Loan Terms

My lender will finance this loan. It will be a 6 month draw, 75% LTV, 100% reno costs covered, 12.75% rate at 3 points in cost. We can adjust to 12 month term, but this adjusts the rate up by .5%. Total loan amount not to exceed 75% ARV.

After 6 months I would like to convert the amount owed ($910k) to a conventional loan to hold and rent out the property

Can I get financing for 9 months with no payments for 9 months using my investment property (STR) as collateral?

Any suggestions are greatly appreciated!

Thanks David.  I have the 12 month option (just a little more expensive) but may end up using it to get the property sold.  Thanks again and greately appreciated!

View report

*This link comes directly from our calculators, based on information input by the member who posted.

Hello all,

This is a fix and flip. I am confident the estimated ARV is strong (it may in fact be a little conservative). The $300k repair costs are based on a very recent/thorough inspection report and my GC's scope of work. The property is surrounded by multimillion dollar estates/mansions. It is located in an exclusive gated community with little to no single family home inventory left. It is also quite challenging to find land and initiate new construction.

IF we are able to renovate AND sell the property within 6 months life is good. However, I am trying to create an exit plan if we are not able to sell within 6 months. Since this is my first fix and flip financing is at a premium (see terms below). I'm fine with that because of the projected ARV.

Bridge Loan Terms

My lender will finance this loan. It will be a 6 month draw, 75% LTV, 100% reno costs covered, 12.75% rate at 3 points in cost. We can adjust to 12 month term, but this adjusts the rate up by .5%. Total loan amount not to exceed 75% ARV.

After 6 months I would like to convert the amount owed ($1.1 mil) to a conventional loan to hold and rent out the property for $6k+ per month (comps support this). However, the mortgage on $1.1 mil is $7k per month (1k more than rent), the total due at close is $264k and I only have $100k in cash for closing.

Does anyone have any other ideas for an exit strategy (plan A, B, or C) to hold me over until I can sell? Any suggestions are greatly appreciated!