Investor · Big Bear, CA · Member since 2016 · 17 posts · 0 votes
Hi BP community, I've been looking for advise to get funding for a 2-3 unit in Ithaca, NY that has partial fire damage and needs new roof. Potential is good due to the location that near the university. Good for university student renting. I'm looking for a private lender who could make this possible. I also need a good honest contractor in the area that won't overprice the fix cost. I appreciate any advise and recommendations. Thank you so much!
@Irving Casas For properties that aren't livable at the moment, a commercial loan can be a good fit for purchase + rehab financing all in one loan. Those typically would be commercial and held as a portfolio loan with the bank. It doesn't have to be multi unit, the "commercial" part is the flexibility to get the purchase + rehab financing. Alternatively you could use hard money, but I find that's very expensive and also short term only.
You want to avoid standard residential conforming loans, those that most banks offer and are resold to the government. I tried that in the past and it was a waste of time. They would run all the numbers and pull my credit, and then when the inspection was done, the "non livable" part would kill the loan.
I have asked a lender already and he told me that banks shy away from fire damage properties and I would not be able to get a loan for that. I won't be able a conventional loan for it. FHA 203k maybe ideal but the fees would be high like 6%.
If I were you, I would consider a hard money loan or a bridge loan until you can get the property stabilized. Either way, if the deal is good enough you will be able to find funding.
If I were you, I would consider a hard money loan or a bridge loan until you can get the property stabilized. Either way, if the deal is good enough you will be able to find funding.
Yes I totally agree. That’s why I posted here if I could get any recommendations for hard money lenders. Do you know any? Thank you for your comment and support.
@Adonna Villanueva Personally I would recommend local banks in your area, ideally where the loan officer knows the property in question. Ask for the commercial lending department, and it should be a portfolio loan where the bank will hold it in house and will have more flexibility on their lending decisions.
I did this in VT with a few local banks, for properties that weren't livable at the time. The fees are far less, most of mine were 1 point, minimal closing costs, and the loan would convert to a normal mortgage once the rehab was completed (no need to refinance out and incur a second set of closing costs).
If I were you, I would consider a hard money loan or a bridge loan until you can get the property stabilized. Either way, if the deal is good enough you will be able to find funding.
Yes I totally agree. That’s why I posted here if I could get any recommendations for hard money lenders. Do you know any? Thank you for your comment and support.
Wildcat is pretty popular here in Columbus. Not sure if they service New York.
I have asked a lender already and he told me that banks shy away from fire damage properties and I would not be able to get a loan for that. I won't be able a conventional loan for it. FHA 203k maybe ideal but the fees would be high like 6%.
Tioga State Bank covers Ithaca, and they have some phenomenal rehab loan options. Rick Annunziata there is fun to work with and he knows his stuff.
As far as hard money lenders, @Bob Reinhard might be able to help you out! Let him know I sent you if you reach out.
@Adonna Villanueva Personally I would recommend local banks in your area, ideally where the loan officer knows the property in question. Ask for the commercial lending department, and it should be a portfolio loan where the bank will hold it in house and will have more flexibility on their lending decisions.
I did this in VT with a few local banks, for properties that weren't livable at the time. The fees are far less, most of mine were 1 point, minimal closing costs, and the loan would convert to a normal mortgage once the rehab was completed (no need to refinance out and incur a second set of closing costs).
Good luck!
Great to know these tips. Thank you Tom, I appreciate it.
Hi Bob! Thanks for reaching out and thank you @Stephanie Jacobson for your recommendation (would you know any honest contractors in the area?). Bob can you tell me about the fees? Please DM me. Thank you.
I have asked a lender already and he told me that banks shy away from fire damage properties and I would not be able to get a loan for that. I won't be able a conventional loan for it. FHA 203k maybe ideal but the fees would be high like 6%.
Tioga State Bank covers Ithaca, and they have some phenomenal rehab loan options. Rick Annunziata there is fun to work with and he knows his stuff.
As far as hard money lenders, @Bob Reinhard might be able to help you out! Let him know I sent you if you reach out.
I will search about Tioga Bank. Thank you so much Stephanie for being so helpful.
Your best bet is going to be to get someone that specializes in those sorts of renovations
Fire, flood, etc
The renovation is not going to be cheap. These companies do most of their work with insurance claims so their cost is going to be high. Make sure they know up front it's not an insurance claim so they don't try and add a premium to the renovation price.
Make sure your insurance company will insure the property. You will probably need a builders policy during the renovation and then a long term policy once done.
In this case, I think a short term private money lender is your best bet.
Your best bet is going to be to get someone that specializes in those sorts of renovations
Fire, flood, etc
The renovation is not going to be cheap. These companies do most of their work with insurance claims so their cost is going to be high. Make sure they know up front it's not an insurance claim so they don't try and add a premium to the renovation price.
Make sure your insurance company will insure the property. You will probably need a builders policy during the renovation and then a long term policy once done.
In this case, I think a short term private money lender is your best bet.
Oh really, wow, sounds like more obstacles to get through to get this property. Thanks for the tips, I really appreciate that from someone who experienced it. That’s really helpful.
I have another property but it’s a mobile park property that can hold up to 7 homes. Currently it has 3 homes in the property but lender told me that it’s considered commercial loan.
How do you go about this kind of property? Is it hard to find financing on this? Is it worth it? Sorry to throw in some more questions. I’m in the learning curve. Thank you so much on any insights.
Hi Adonna, I've worked with Jonathan Ward at Tioga State Bank and he's very knowledgeable. I would recommend getting in touch with Jim Mastronardi at Visions FCU. They're awesome and he's super helpful in working with investors run numbers on various scenarios. Visions definitely covers Ithaca.
Hi Adonna, I've worked with Jonathan Ward at Tioga State Bank and he's very knowledgeable. I would recommend getting in touch with Jim Mastronardi at Visions FCU. They're awesome and he's super helpful in working with investors run numbers on various scenarios. Visions definitely covers Ithaca.
Hi Christopher thank you for the recommendations, I appreciate the support.
@Adonna Villanueva Personally I would recommend local banks in your area, ideally where the loan officer knows the property in question. Ask for the commercial lending department, and it should be a portfolio loan where the bank will hold it in house and will have more flexibility on their lending decisions.
I did this in VT with a few local banks, for properties that weren't livable at the time. The fees are far less, most of mine were 1 point, minimal closing costs, and the loan would convert to a normal mortgage once the rehab was completed (no need to refinance out and incur a second set of closing costs).
@Irving Casas For properties that aren't livable at the moment, a commercial loan can be a good fit for purchase + rehab financing all in one loan. Those typically would be commercial and held as a portfolio loan with the bank. It doesn't have to be multi unit, the "commercial" part is the flexibility to get the purchase + rehab financing. Alternatively you could use hard money, but I find that's very expensive and also short term only.
You want to avoid standard residential conforming loans, those that most banks offer and are resold to the government. I tried that in the past and it was a waste of time. They would run all the numbers and pull my credit, and then when the inspection was done, the "non livable" part would kill the loan.
@Irving Casas For properties that aren't livable at the moment, a commercial loan can be a good fit for purchase + rehab financing all in one loan. Those typically would be commercial and held as a portfolio loan with the bank. It doesn't have to be multi unit, the "commercial" part is the flexibility to get the purchase + rehab financing. Alternatively you could use hard money, but I find that's very expensive and also short term only.
You want to avoid standard residential conforming loans, those that most banks offer and are resold to the government. I tried that in the past and it was a waste of time. They would run all the numbers and pull my credit, and then when the inspection was done, the "non livable" part would kill the loan.
Thanks for that great tip! Good to know, I appreciate it. Now the part of finding a lender I haven’t find one yet. Thank you so much!
@Irving Casas For properties that aren't livable at the moment, a commercial loan can be a good fit for purchase + rehab financing all in one loan. Those typically would be commercial and held as a portfolio loan with the bank. It doesn't have to be multi unit, the "commercial" part is the flexibility to get the purchase + rehab financing. Alternatively you could use hard money, but I find that's very expensive and also short term only.
You want to avoid standard residential conforming loans, those that most banks offer and are resold to the government. I tried that in the past and it was a waste of time. They would run all the numbers and pull my credit, and then when the inspection was done, the "non livable" part would kill the loan.
Commerical loan is the way when the home is inhabitable, got it! Thank you saving us all time evaluating deals.
I would recommend looking at Harm Money Lending. There are some great recommendations from BP if you click Build Your Team at the top left of the screen and go to hard money lenders.
@Adonna Villanueva @Daequan Carr and his team at Quickline Capital can help.
When’s the next you’ll be in Ithaca?
Hey Matthew, sent you a friend request and private message today 9/29/23 when you have some time can you check out my private message to you thank you Edwin