San Antonio Hard Money/Private Money Lenders

5 Replies

What are the best Hard and Private Money lenders in San Antonio?  Furthermore, I have a hypothetical situation... I'm still doing my homework before I purchase my first rental.

What if I have a hard money loan that has a term of 6 months, and I can't find a bank that won't refinance until 12 months

I'm thinking the way to prevent this would be to make sure that I have a bank lined up that I know for sure will refinance in 6 months. Either that or go with a hard money lender that has a 12 month term, and a bank that will refinance 6. Is this something I can only find out at the time of refinancing, or can i find out form banks/lenders what their grace periods and terms are before I close on a deal?

@Jacob Mistric Most hard money lenders will offer a 12-mo term to ensure a 12-mo seasoning period. Alternatively, there are a lot of commercial/portfolio lenders who only have a 1, 3, or 6-mo seasoning period so that you can exit your HML using it's as-is-value vs an at-cost LTV (if you're creating new value). Otherwise, whatever you buy it for is what your refinance loan will be based off of as well (Original purchase price, or appraised value, whichever is less).

You'll be able to get verbal yes's from lenders on the take out now, but you won't be able to 'secure a term sheet' now on the take out until you're really ready to proceed. One of the most common reason for this is lender's don't want a term sheet sitting out there at certain terms for too long as markets can change overnight, and now they'd be originating that mortgage at a massive (potential) loss.

Hope this helps! Feel free to PM me if you wanna chat more on this.

@Jacob Mistric I've worked with a few HMLs in San Antonio that have programs where you can refi with a conventional lender without the 6 month seasoning period. Others start with hard money terms and transition into long-term mortgages at competitive rates. Feel free to shoot me a PM for more info.

@Jacob Mistric

In my experience, HMLs write their note on a 12 month term and so for this specific seasoning period. There are some situations wherein a lender can provide the back end refinance in less than 6 months seasoning period but generally speaking, in renovating and stabilizing your rental, you'll need more than 3 month seasoning regardless of the lender. Most conforming FNMA type lenders offer cash-out refinance with 6 month seasoning so a 12 month HML should be ample time to get the 'take out' completed.

Yes, absolutely you should speaking to a few back end refinance lenders in advance of closing on the acquisition. This is the case regardless of whether you pay cash or use a HML.

@Jacob Mistric

What are the best Hard and Private Money lenders in San Antonio?

You can use the 'Find Partners' tab on BiggerPockets and sort through HMLs as a starting point.

What if I have a hard money loan that has a term of 6 months, and I can't find a bank that won't refinance until 12 months

That would be a short term-length for a HML. Many HMLs offer 12 mo. term lengths.

Either that or go with a hard money lender that has a 12 month term, and a bank that will refinance 6. Is this something I can only find out at the time of refinancing, or can i find out form banks/lenders what their grace periods and terms are before I close on a deal?

You can speak with both parties and they should be able to give you an idea of term length and seasoning requirements up-front as neither of those data points necessarily require full underwriting.

Best of luck!

Michael