Hard Money Loan Under $50k

3 Replies

Hey everybody, I have found a great deal in my hometown of Columbia SC. It's a duplex that's listed for 50k. The sellers are motivated to sell. The property already has two tenants which yeilds $1170 per month. So the cash flow is definitely there. Rougher neighborhood but a side of town I am familiar with plus I would have a property manager managing the property. I want to go the HML route but I just cannot find a company willing to loan for under $50k and most cases $75k. Plus the property doesn't need major rehab work which kind of rules out the BRRRR method. It's essentially turnkey minus the usual maintenance such as new carpets and paints. My question is should I just try to find the money, pay the cash, then immediately cash out refi? Because I do have a heloc but it's only for 20k. I would have to take out a personal loan plus some cash reserves but I honestly think that this deal is worth it. Or do you know of any other ways that make sense? I don't think that conventional loan route will work because I think that the seller wants to sell quickly especially at this great price. I would love to be able to find a HML lender willing to loan so that I may refinance after the seasoning period. Any suggestions? Thank you in advance for your help!

Hi Brandon,

From my research (I haven't quite been in your situation, yet).  if you are willing to leave 25-30% in the property you may be able to get a delayed financing loan from a conventional lender after you purchase the property, Most cash-out refis require a seasoning period of 6 months to a year, if you can find a lender who is willing to lend for that length of time. It does sound like you have a deal here. Maybe put together a true deal proposal- lay out all the details, what you are bringing to the deal, etc, and shop it around your local real estate investment group.
Have you done any other deals, or would this be your first? I ask because it will play into your credibility.

Originally posted by @Amanda G. :

Hi Brandon,

From my research (I haven't quite been in your situation, yet).  if you are willing to leave 25-30% in the property you may be able to get a delayed financing loan from a conventional lender after you purchase the property, Most cash-out refis require a seasoning period of 6 months to a year, if you can find a lender who is willing to lend for that length of time. It does sound like you have a deal here. Maybe put together a true deal proposal- lay out all the details, what you are bringing to the deal, etc, and shop it around your local real estate investment group.
Have you done any other deals, or would this be your first? I ask because it will play into your credibility.

 Thanks Amanda for the advice. Yes, as a matter of fact, just looking for options today I happened to stumble across delayed financing here on BP. It seems like it would be my best option. But doesn't delayed financing give you all of acquisition costs back? That's what I'm hearing just as long as it will appraise for that amount of course. 

Generally speaking delayed financing is just that- delayed loan based on theh purchase price. So your down payment (70-80%) would still be left in the property. Cash back re-fi can be based on the new ARV, but those usually have a seasoning period.

It sounds like a potentially good deal to me, and I live 2 hours away. I suspect that one of your colleagues in an investment group would be happy to partner with you in some way to fund the deal.

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