I've bought a property, got the money from a hard money lender, after fixing it up I've decided to keep it as a rental property. I am looking for a lender to refinance the property to pay off the hard money lender and also to get money out to keep investing. This is the best I've got so far, rate of 5.25% for 30 years, origination fee of 2%, service fee $999, pro rated interest $566, third party costs TBD, 75% loan to value. pre payment penalty if I sell it before 3 years...Is this normal for refinancing under an LLC? Does it sound good? Thanks.
Considering its in an LLC product that seems very competitive. What you could do to get a better rate and terms is to quitclaim the deed into your name and out of the LLC so they can underwrite you personally. You can expect rates of 3.5-4% at that point.
@Roberto Vasquez That seems like a pretty good deal. Is there a personal guarantee as well? If not, then this is really an amazing deal.
@Lien Vuong Hi, thank you, and yes you are right. One of the banks actually offered me that option, but only to refi and pay off my debt, but in order for me to get money out they mentioned I will need to own the property for at least 6 months.
@Ryan Blake yes, I am the guarantor, I have excellent credit. Thank you for your response.
@Roberto Vasquez Still a solid deal. I know it is costly but that happens when you have a loan in an LLC. Just make sure you are still cash flowing at the level you want/need.
@Ryan Blake 100% I really appreciate it, this is my second deal and I am still learning, it's a process. Thanks again.
All of the terms you are getting are pretty normal, not a bad deal there. Interest rates can vary with lenders who can fiance under an LLC depending on market, property performance, credit and anything else the lender deems critical to the performance of the property. With that said it is hard to tell if your interest rate is a good deal or not depending on your situation.
My lenders are doing circles around those terms. Especially 2 pt origination. I just saw 2 pt origination, 75% LTV cash-out for 4.5%.
@Sean Thompson Thank you Sean, I appreciate you took time to reply to my question, looks like I got a good deal.