Hey There BP Community!
My brother and I have some construction loans on new properties coming up on closing. We have been trying to move aggressively with our purchase rate and have 10 properties. Some purchased and rehabbing with hard money with more under contract. We came across a bank lender that would do construction loans at 75% ARV. The most recent 5 deals we have looked for approval with them. We sent them a 6th property we wanted to do but they responded with putting a pause on lending. We were expecting them to want to pause lending at one point but want feedback on what they are proposing.
*** One side note is they didn't specify if these conditions were only on the 6th property and moving forward, or if this was on the previous 5 under contract. We wanted to get some feedback before responding to them. We have room in the deals for hard $ but would prefer not to being a more expensive option)
Stopping all offers until we have agreed on some conditions and covenants:
1. Rent Roll Requirements
2. Financial Reports
3. DSC Minimum
4. No other loans from other institutions w/o bank approval (this would mean no hard money or private money loans then correct??)
5. Reserves with bank
Their main goal is to help guide us toward success and build a strong portfolio.. etc etc.
We totally understand their standpoint being a lending institution, however we trust in our conservative numbers and want to keep scaling. We want to counter with them taking on these 5, and then add as the go without the conditions but don't think that will happen.
Private Money may be our next bet and adjusting our #'s in future deals. Any other thoughts in this situation?
