I am looking at my first real estate investment in the Clearwater Florida area 33756 zip code in Pinellas County. It’s a 3/1 home 846 sq ft. Purchase price is $158K and needs 50K in rehab. Short term loan (3 months) for home and rehab = $203K.
What could I expect to have as current average loan interest rate and points/fees if I am a new accredited investor with excellent credit? Thanks.
I am looking at my first real estate investment in the Clearwater Florida area 33756 zip code in Pinellas County. It’s a 3/1 home 846 sq ft. Purchase price is $158K and needs 50K in rehab. Short term loan (3 months) for home and rehab = $203K.
What could I expect to have as current average loan interest rate and points/fees if I am a new accredited investor with excellent credit? Thanks.
Lender · Tampa, FL · Member since 2013 · 2k+ posts · 2k+ votes
1y
I've been a lender for more than 30 years...most of that in Tampa. I think the biggest hurdle you are going to have is establishing experience. Most legit lenders are going to want to see that you have a couple (really more) under your belt. They will want to see that someone in the partnership group has done deals before. My wife and I have flipped several homes on the side and, I can tell you, we made most of our mistakes in the first 5-10 deals we did. Most lenders, including us, are going to ask for a "Schedule of Experience" which lists the deals you've done over the past 36 months or so. It's not impossible to get financing, but they will require more of a cash, injection from you and they won't be as agressive with the terms. If you can nab an experienced partner or if the GC you're using is willing to sign a completion guaranty, that will make it easier. A super-short, 3-month term is not something we see often. I would contend that buying, rehabbing, and getting a renter into a home in 90 days would be pretty quick. Most lenders are going to make your term for 12 months. If this is your first deal, you're likely going to have a rate in the 11%s with approximately 3 points...give or take. Credit is important, but your lack of experience is going to make lenders wary of being super aggressive. I hope that helps.
Lender · USA · Member since 2022 · 1k+ posts · 1k+ votes
1y
Hey Frank - Interest rates/fees vary depending on the lender and loan type. For a hard money loan, you might be looking at interest rates anywhere from 9-12%, with points typically around 2-4%. Since you have excellent credit, that could help a bit on terms.
Do you have recent rehab experience? That can play a role in aquiring favorable terms. Also, I am based in Tampa so I'm happy to connect!