All Forum Posts by: Kerry Boyle

Agree with @Michael Noto. Try to get a 203k.

If you think you landed a particularly good deal and using a 203k loan may weaken your offer too much, you can use a Hard Money Lender if the following is true:

1. You will not occupy the property during the term of the hard money loan.

2. You have enough cash to put a sizable payment down on the property. The down payment varies by lender, 100% financing is possible if the deal is good but can be more expensive than putting skin in the game.

3. You are able to refinance out when the time comes. Get a solid exit strategy.

Sounds like your lender doesn't have any money.

Great! That is what I thought and then a lender I spoke to said you would need a lease before they could qualify that money... which would be hard to have before you even rehabbed the place.

I'll find a lender who actually does 203k on MF hopefully.

For a 203k loan on a multi-family:

Does underwriting look at your income exclusively, or do they use the ARV appraisal's market rents suggestions to supplement (some percentage) your income?

Look for a lender that does not use DTI. They exist in hard money and rental loans.

For rentals, I have seen a few lenders that look at lease and DSCR only, you should be able to run those numbers yourself. For just hard cash-out, you just have to be confident that your appraisal will hit the ARV you want and you have the reserves for the interest only payments with a solid exit strategy.

@Cortney Jones Wow thank you for posting all of that.

I don't know how many times someone says they need international business partner funding and they will pay 18% for one year. LinkedIn definitely has legit lenders/private money folks in there, but it is also filled with scammers from both sides.

What you want is a free quote from as many lenders as possible. Be honest and tell them what you have been offered already, if a deal is too good to beat you will save both parties time. It also gives them the opportunity to compete if they don't immediately beat the rate.

I'm curious to know, what would vet a lender to you? Personal references seem to be the best for us, but does providing references to title companies work?

The new lending entity is the one with the requirement. Your current loan on the property is irrelevant (aside from how much is owed and if you owe any pre-payment penalties). The new lender is the one that may or may not have seasoning requirements. 

I'll give the following example:
1. Your LLC owes 100k to a HML, PML and it is shown on title.

2. The property is repaired, you just signed a lease with a tenant, and the ARV is 200k as vetted by an appraisal.

3. You can take up to 75% of the value of the ARV out (150k in this example) at any time so long as #2 has happened.

In this scenario, your new lender has NO seasoning requirements. PM me if you have more questions, I think we are hijacking this thread off topic.

Right! So to be clear, private and hard money don't have those requirements and can cash-out on a property at any time - but typically after repairs and sometimes after a lease is signed. Any hard money lender or private money lender saying they won't do it until 6 months passes has their own rule (or their banks rule) saying this.

Price quotes should be free! Hope you checked many sources, even national lenders. 

@Erik Drentlaw seasoning isn't a state dependent requirement, it is an overlay for lenders that sell to fannie/freddie. Private/hard money typically doesn't have these requirements. For example, we do cash-outs in Texas without seasoning. We (and others) typically wait until property repairs are complete and occasionally the property must be rented.

The optimist in me says all HMLs are interested in successful borrowers. Sometimes that means requiring borrowers to be in a successful position. If you have no liquid money, and you find out that repairs are going to cost 15k more than they quoted you in the beginning, then you are in a bad position. These lenders that require their borrowers to be successful will also require some liquid money.

However, I'm sure there are some HMLs that ARE interested in acquiring your property (and potentially your down payment you put into it). I doubt they care about much, other than their LTVs.

Find a private lender or JV partner if you don't have the money and the deal is good enough. You will make SOME money and learn a lot. You can also use a HML in conjunction with those two.