All Forum Posts by: Jemir Martinez

Hard money will not likely work in this scenario. From the sound of it the property seems to be in fair condition and stabilized, also the sales prices seems to be at market. For hard money to work you will need to be able to exit the loan within 12 to 18 months, depending on the lender. The only way to exit is to either sale or refinance. As you mentioned the property does not need much of a rehab, so refinancing out of the hard money loan will not work. The highest I have seen a lender go on a rate/term refi on an investment property is 80% LTV. So at a loan amount of $350,000, the value of the property would need to reach ~$437,000. Unless you can get the property for roughly 20% below market and put some equity in I don't see the deal meeting lender requirements. You could see if the seller has any interest in seller financing.

@Jemir Martinez one other thing I would encourage you to think about, from what I read, is the need for some cash reserves. If you don’t have enough for 20% down, or 3.5% for a house hack, with a little left over… most experts recommend at least 6 months of expenses. Then I might encourage you to wait a little longer until you have some more cash on hand. I’d hate to see someone purchase something assuming rents will cover the mortgage and then major appliances, old plumbing or other major repairs make this dream opportunity a nightmare. But we all have different risk comfort levels, all I’m encouraging you to do is think about that in your analysis of your deal.

Best of luck to you.

Hard money is not going to help you much. They want lots or equity (either large 25-30% down) or somehow the you are getting the deal of a lifetime. Then they expect you to invest in repairs and have the ability to qualify for a permanent loan or sell quickly for a profit. Hard money calls that an exit strategy. 

Section8 guarantees part of the rent and tenant pays their portion. Have seller show you their bank statements depositing the two  rent payments. 

@Jemir Martinez

hard money loans are intended for short term events.  If you are planning to hold onto the property, a good hard money lender (I suppose also a wise investor, as well) would make sure to be pre-approved to refinance the property sufficiently to pay off the loan.

Even hard money loans will require you to put some money down.  Also, I know they are owner-occupied, but I think the property still needs to be unoccupied --- will need to check into that.  Part of the advantage that you pay for with the high rates of the hard money loan is that you can use it on properties in such disrepair, e.g. unlivable, that conforming loans would not qualify...