The meeting with the hard money lender went well. A few major takeaways;
- Typical due diligence period needed to process the loan? 48 hours to look at the deal. Order Appraisal process 5 – 7 days.
- What is the interest rate of the loan and is it fixed?
(Fix n Flip) 8 – 12% 12 months with a renewal option.
(Rent Loan) 5 - 7% 30 years fixed IR. A prepayment penalty if paid off within the first 5 years.
- LTV or does it depend on the project/appraisal? Depends on Appraisal and ARV, will typically loan up to 80% of LTV
- Will they fund 100% rehab? Yes
- Please further explain your points process if you have one? 2 or 3
- Are points paid upfront? Paid at closing
- What is the rehab draw process? Is there a cost for each draw? $150 – $250 per draw. When work is done. Inspector out there immediately, upon approval, the buyer will be able to draw. Materials and any upfront fees for the home improvements will be out of pocket.
I have a meeting scheduled today with a conventional bank lender to discuss their options and refinance process. I am planning to get pre-approved for a refinance during the due-diligence period of the BRRRR method.
