All Forum Posts by: Kyle Altenau

The only issue here may be if you are planning on occupying one of the units. Most HML and bridge lenders won't be able to lend on a property that is owner occupied, even if it's just 1/4 units.

You may have trouble finding a hard money lender willing to lend under those conditions. Typically if the exit includes things like paying off debt to get the credit score up, they will be concerned with the exit. If it's very low leverage it may work. 

If you want to use the refinance to invest in another property, you could always use that as additional collateral with a hard money lender instead. This would allow you to use the equity without having to worry about pulling money out and then the money just sitting there while you wait to find a deal.

What a HML could do once you find another deal is finance the new deal 100% and depending on how the numbers shake out, including some operating capital. To do this, they would put a lien on the property you currently own and the new deal you are looking for.

Most hard money lenders won't want to go that low on loan amount. The other issue is they don't like investors that are geographically far from their property. They definitely would be very hesitant to lend to first time investors that are far from the property.

I'd very highly recommend choosing somewhere closer to home. If you're in Las Vegas, why not look there? Last I saw market outlook is pretty bullilsh there. You're going to make mistakes as a first time investor. Being able to jump in your car and get to the property to do what you can or get to city hall to put out fires is going to be integral. I ran a flip from the Jersey Shore in Philadelphia a few years ago and even after having experience behind me, there were some mistakes I made that made the 90 minute drive to the property an extra problem. 

@Dillon Y. I think the plural Realtors may be the multiple listing agents. I've done a lot of acquisitions in Philadelphia and sellers will still get their property listed at very very low prices. 

If your proof of funds isn't being taken seriously you may need to consider if you are using the right lender. If you'd like to message me I can give you some suggestions on HML in Philly.

It's already had a huge impact as rates are at historic lows.

I'd be concerned if I were in the flipping business. There's a decent change the nest egg that your end buyer was counting on for down payment was sitting in equities and took a big hit the last 2 weeks. I don't think there will be any significant damage to the market though. 

If the as is value is at least $112,500 and the after repair value is at least $170,000, some hard money lenders will consider doing it for $10,000 down + closing costs.

If you're converting it from an office to 4 units it will definitely take much more than $20,000 though. For example, if you're building a kitchen where there wasn't one before at a bare minimum it will take you $10,000. If there's already a working kitchen in the office space, you'll need 3 so that's $30,000 right there. 

By not great how low do you mean? (feel free to message me if you'd like). There are some financing options that are in between banks and hard money. You won't get the low rates you'd get through the bank, but you'd be able to cash out and get a somewhat lower rate. 

The general answer here is "capital stack". The more versatile and available your capital stack the better off you'll be trying to navigate similar situations. It's hard to really summarize all the ins and outs of capital stack, but it essentially refers to the different types of debt and equity you have available to you. 

Using the example above. You need to find an extra $120,000. Let's say you get a private unsecured loan from your rich aunt. Now you have $100,000 left. Maybe you get someone to come in as a preferred equity partner. You'd be paying them a preferred return and then have some sort of pre set agreement as an "exit fee". The exit fee could be if you sell it they get X% of the profit, if you cash out refi, they get a flat exit fee once that happens. That's just one example of how a capital stack can look. 

Ideally you want to keep your capital as simple as possible. 100% financing for this would be the simplest and easiest. But having the availability of a diverse capital stack can mean the difference between making a deal happen and not. The more lenders and investors you start to work with, the more people you'll be able to call up and see if they are interested. Some larger commercial brokers can also help you place equity, but that's typically for much larger deals. 

Some hard money lenders can do as little as 10% of purchase price down and 100% of renovation cost (if you have any renovation costs). It all depends on the as is value and future value after renovation. If you're looking to hold it as a rental you'd then want to refinance as quickly as possible. Feel free to message me if you'd like some more info. 

@Claude Calixte depending on some more information, I may be able to help you. If you'd like some more information, message me some more details about the prospective deal.