All Forum Posts by: Jared Rine

Obviously this is just my $0.02, but I've been doing construction loans a long time.  I'm going to echo @Aryia Bala + @Mike H. I think in this market, what you're asking for is a unicorn/needle in the haystack/doesn't exist type of request. 

@Karolina Powell..I'm going to add my $0.02 to this. Full disclosure, I'm a mortgage broker out of CA who places this type of $$. There are lenders out there who will do some of what you're looking for, in some capacity, but not all of it. Example - 85% is achievable out there, but only on 1-unit SFR's, and most lenders will typically have loan amount minimums (it seems based on an average from the info provided, even if these were all 1-Unit they would not hit those minimums). I don't claim to know everyone in the space, but 2-4 units are typically maxed at 80%, many lenders at 75% LTV. 85% or higher would be way too risky in this market. However you structure it, and whoever is doing the loan, you should be able to get less than 8.5% interest rate assuming all markers are hit that you mentioned.

I might be able to help you, but I'd have to see more details, and likely would be maxed at 80%.  Pricing should be better than 8.5%. Part of the issue as well is the value/price per property is in a lower range, and thus loan amount is smaller, which I know works for these types of portfolios, but it's not necessarily what these lenders WANT to lend on.  Hope this helps. PM if you need. 

@Magnus Wikström..what leverage are you trying to obtain?  Full disclosure, I'm a mortgage broker, out of CA, and have years of experience placing private money construction loans for different clients. Mainly luxury spec builds here in CA.  I would tend to agree with you about your points about private investors vs. "hard/private" money companies, but I'd be interested to understand what you're looking for from a leverage perspective.   You might be surprised by what's out there.  I'd also be interested to hear more details about the projects you're doing, if your open.  Feel free to send me a PM/message as well.  Thanks,

@Mitzi Cil...I don't know what their ad looks like, but their program is real. And it's 100% financing based on an ARV; they're not just going to give you 100% loan to cost $. You also have to hit liquidity requirements and stuff like that, and they don't just let anyone use their program - have to have experience, they dive in your income, and deals I've had quoted as a broker always include payments, as they typically want 3-6 months front funded in the deal, whether the loan amount allows for it, or client has to bring it in. Full disclosure - I'm a mortgage broker; I do not work for them. I will say also as long time mortgage broker - what you're looking for is not available in the market from ANY lender; sounds like you need a partner. Hope that helps.

@Patrick Elias...you've got some good answers so far, but figured I'd add my $0.02.  There are too many factors in commercial to provide you general terms as terms can vary a lot depending on deal factors.  There needs to be more information regarding property type, location, type of deal (value-add or stabilized), your financial strength, experience, etc. This, and how flexible you want to be will affect what lenders you approach and who will lend on your deal. General terms are pretty much a disservice.  As @Givo Aghasi mentioned, 75% (or up to 90% CLTV) is out there, and I'd agree. But that's so rough. As example, I tend to broker alternative, private and SBA. Assuming numbers + deal checks out, can do 30 yr fixed in low-mid 8's, at best on alternative side.

@Tim Nethers ...they are out there, but you have to know who to contact.  Full disclosure - I broker these types of loans.  But it's why people like me stay in business.  Knowing who to contact and what lenders can execute in the marketplace is so crucial and as an investor, that can eat up a lot of time and resources that would otherwise be better used elsewhere when trying to do it on your own.  The loan amount itself is going to be a main issue for most lenders at ~$150,000 value, let alone finding a niche product.  But it does exist.  I don't know if it would work for your situation, but feel free to PM. 

@Jeffrey Sommer...having some experience with this as a broker/lender, this is going to be private money, no matter how it's done. I don't know how else you'd do this because most fix/flip lenders in the space don't understand small multifamily/mixed-use.
 I'm assuming you have solid fico, liquidity and some type of experience.   I'd be interested to hear more about both projects/details/etc., and see if I can help you with any of this.  Is the exit to tenant both properties and refi/hold?  Or is to sell?  DM or hit me offsite.  

@Anne-Sophie Le Bloas in my experience, you should be able to use the tri-plex rental income to offset the PITI. Assuming you currently rent right now, and you are buying the single SFR as a primary, the 3-unit should just be designated as investment and you should be able to use the rents to offset the payment (up to basically 'zero-ing' it out, on paper). If your current lender really cannot do that, I'd find another one who can. I don't see why you wouldn't be able to do this.

@Kamal Sukhija...agree with @Henry Clark; he's one of the best on here.  I would take what he wrote very heavily. Just adding a little $0.02, outside of what he said, most banks are not going to be your friend when it comes to this type of construction, or any for that matter.  Construction lending is few/far between these days.  Most of my clients stick to private money.  

But if you're serious about doing the buildout, I would get more due diligence done.  Plans for what you're building will be key - it's too vague and open right now for someone to advise you on potential cost.  In CA, construction costs are high, but I think outside of the state, you could hopefully get somewhere in the $150-$250/sq ft range for the vertical.  That's not including the equity/money put in getting to build permit.  Land + soft costs (architect, engineering, water, etc. - any cost accounted for prior to permit) should be considered as equity in the deal once ready to build. 

@Dallas Rapoport where is the property?  Are you purchasing as investment?  Let's start there.  OR feel free to PM and we can talk.