Philadelphia, PA · Member since 2015 · 177 posts · 64 votes
Hi everyone,
I am in the beginning stages of pricing the development of a new multi-use property (10 residential, ground floor commercial). I am trying to navigate my way through lending options and was wondering if anyone here has any recommendations for types of lending products.
With this development it looks like the ARV of the property once fully rented will significantly exceed the total cost to build. Our main concern will be ensuring that we are able to at a minimum, get some of our out of pocket costs cashed out. Does anyone know if there are ways to do this without having to finance it and then refinance it like a traditional residential property? Are there any loan products out there that require a 20-25% down payment during the construction phase (higher risk for the lender) but then allows some sort of cash out based on the appraised value of the property during the long-term financing portion?
Insurance Agent · Des Moines, IA · Member since 2014 · 26 posts · 6 votes
6y
Yes, there are programs which will allow the LTV you're seeking and provide cashout refinance on a perm loan. Please send a contact and we can discuss this project further.
Brooklyn, NY · Member since 2020 · 5 posts · 0 votes
6y
Congratulations! It seems you have yourself a nice development here. There are a few options you can do that fit your criteria. Feel free to reach out to discuss.
I am in the beginning stages of pricing the development of a new multi-use property (10 residential, ground floor commercial). I am trying to navigate my way through lending options and was wondering if anyone here has any recommendations for types of lending products.
With this development it looks like the ARV of the property once fully rented will significantly exceed the total cost to build. Our main concern will be ensuring that we are able to at a minimum, get some of our out of pocket costs cashed out. Does anyone know if there are ways to do this without having to finance it and then refinance it like a traditional residential property? Are there any loan products out there that require a 20-25% down payment during the construction phase (higher risk for the lender) but then allows some sort of cash out based on the appraised value of the property during the long-term financing portion?
You will either need to explore options with local and regional commercial lenders or you can explore a loan with HUD. They have great terms for construction loans. With traditional lenders you will need 30-40% equity and will not be able to refi until stabilized. They base loan on LTV or LTC which ever is lower. HUD will give you a higher LTV/LTC.