2nd Position - Cashout Refi - Creative Financing Options?

Question

Anyone know of a reputable and good hard money lender, who would provide 2nd lien position loan on 2nd property non-owner occupied residential property in a nice subdivision in Idaho.  Property was built new in 2013 and has approximately 80k in equity.  Looking for a loan amount of 30k for business purposes.  Good credit.  No history of late payments.  No doc, no income verification, etc...  Interests only; 10-15% acceptable.  Any other options and/or creative ideas would be highly appreciated as well.  Thanks.

Jeff Cichocki · Answer

@Lincoln Kai, what state are you in? I'm not sure if I could help or not, but I may be able to give you a referral. Also, what are you looking for in a lender? I ask because rates and terms are not always the best indicator of what you need. Quality usually costs more. If I give you a referral, I want to make sure I get as close to your expectations as possible.

Oliver Carey · Answer

low doc and no do options

Oliver Carey · Answer

There are lenders that will do a 2nd lien position - but why not just do a cash out refinance at 80% LTV and have only one lender/loan to deal with?

Lincoln Kai · Answer

@Jeff Cichocki I would be interested in refinancing my 1st absolutely, in order to streamline the process and to get the needed additional capital.  Haven't found a reputable lender as of yet, that has the capability or willingness to offer higher LTV lending.

Anthony Dadlani · Answer

@Lincoln Kai I think if you were willing to have a new lender take out the 1st and give you the total amount you are looking for, something creative could be worked out. Make it tempting for a private investor to not consider income, credits score etc.

Best of luck in all your endeavors.

Jeff Cichocki · Answer

I haven't heard of any that will do seconds. I've seen them give you a loan large enough to take out the first plus the extra capital needed. But, that will drastically alter your cash flow.

Have you looked at just doping a complete cash out refi against the the first loan plus what you're looking for? You should be able to get up to 80-85% LTV on a refi. Something to consider is to look at the blended rate of return between the first loan you already have and the 15% you're willing to pay. If you do a refi and the interest rate spiked by 2 points, it still may be cheaper overall than adding the hard money second. Most people don;t take the time to analyze doing a new 1st at a higher interest rate because they think that a higher interest rate on the 1st would ruin the investment. Often times, it doesn't and it's a great solution.

Have you tried any of your local banks or credit unions? They may be willing to something like that with a commercial loan.

Good luck!

Odie Ayaga · Answer

Hard money lenders don't typically do 2nd position loans or loan sizes that small. Have you considered a business credit line?