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Private Lending & Conventional Mortgage Advice

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Moshe Romand
  • Monsey, NY
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Obtaining A commercial loan on a $200,000 property

Moshe Romand
  • Monsey, NY
Posted May 10 2022, 14:43

i'm looking at a six unit property in upstate New York. They're asking $200,000, I need like $300,000 in repair and ARV of like $700,000. The problem I'm running into is that a residential broker won't give me a mortgage due to the factor it's multi family and a commercial mortgage broker is claiming that it's too small for mortgage. Anybody have any ideas how to finance such a deal?

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Mordy Chaimovitz
  • Investor
  • Chicago
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Mordy Chaimovitz
  • Investor
  • Chicago
Replied May 10 2022, 14:59

Hard money lender

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Brianne Lee
  • Catskill, NY
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Brianne Lee
  • Catskill, NY
Replied May 10 2022, 15:24

What part of upstate Ny?

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Moshe Romand
  • Monsey, NY
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Moshe Romand
  • Monsey, NY
Replied May 10 2022, 15:34

Catskills New York

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Brianne Lee
  • Catskill, NY
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Brianne Lee
  • Catskill, NY
Replied May 10 2022, 15:41

+1 (518) 248-5884
Imelda

National Bank of Coxsackie 

I recently had a good experience doing a cash out refi of a non owner occupy rental via a business loan with Imelda. Maybe she can help you

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Kevin Luttrell
  • Lender
  • Orange County, CA
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Kevin Luttrell
  • Lender
  • Orange County, CA
Replied May 10 2022, 15:54

If you're trying to BRRRR this and need to finance the rehab, most fix and flip lenders will be able to finance the purchase and rehab for you.

For permanent financing, over 4 units rules out all normal conventional lenders. You'll have to keep calling around - there will be a local community bank or credit union that can do it no problem. You're not as likely to find 30 year fixed financing though. More likely 15yr-25yr amortization with an adjustable rate. 

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Anthony Vargas
  • Elk Grove, CA
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Anthony Vargas
  • Elk Grove, CA
Replied May 10 2022, 23:25

@Moshe Romand google Visio Lending, they're legit.

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Stephanie P.
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  • Washington, DC Mortgage Lender/Broker
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Stephanie P.
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Replied May 13 2022, 12:04

@Moshe Romand

You've got a couple of things going against you here.

The loan size is too small for regular lenders. The cost of the renovation is 1.5 x the cost of the property. It's in the Catskills so it's more than likely going to be considered rural and the LTV is pushing past 70% of the ARV

If you can't get the numbers lower and then get financing from a local bank or credit union, I'm not sure this one gets done.

Best of luck

Stephanie 

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Stephanie P.
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Stephanie P.
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Replied May 13 2022, 12:04
Quote from @Anthony Vargas:

@Moshe Romand google Visio Lending, they're legit.


 Visio is legit, but they won't do rural or construction loans on commercial properties that I know of.  Catskills is probably considered tertiary market at best and ultimately rural.

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Ryan Hehman
  • Realtor
  • Washington, DC
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Ryan Hehman
  • Realtor
  • Washington, DC
Replied May 13 2022, 12:34

I think it's possible that a commercial lender would take this on as an acquisition/bridge scenario, but more specifics about the property are needed. Feel free to DM me for more info.

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H. Jack Miller
  • Lender
  • Boca Raton, FL
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H. Jack Miller
  • Lender
  • Boca Raton, FL
Replied May 13 2022, 13:49

There are plenty of private lenders who would do this, from what I am hearing. I dont think I can say here as i dont think we are allowed to self promote, but if you contact me I can let you know.

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Nate Monson
  • Real Estate Agent
  • Albany, NY
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Nate Monson
  • Real Estate Agent
  • Albany, NY
Replied May 16 2022, 08:15

@Moshe Romand this feels like a classic hard money scenario to me. If you can find someone who will fund the purchase price and rehab for a lesser interest rate than a hard money lender then I would go with them. But short term hard money feels like the best option to me for you situation.

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Erik Estrada
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#2 Private Lending & Conventional Mortgage Advice Contributor
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Erik Estrada
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#2 Private Lending & Conventional Mortgage Advice Contributor
  • Lender
Replied May 16 2022, 11:08

There are fix and flip loans programs available. The minimum loan amount is $75k and they can finance 100% of the repairs. Rates are generally less than what hard money lenders would quote you. 

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Erik Estrada
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#2 Private Lending & Conventional Mortgage Advice Contributor
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Erik Estrada
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Replied May 16 2022, 11:09
Quote from @Moshe Romand:

i'm looking at a six unit property in upstate New York. They're asking $200,000, I need like $300,000 in repair and ARV of like $700,000. The problem I'm running into is that a residential broker won't give me a mortgage due to the factor it's multi family and a commercial mortgage broker is claiming that it's too small for mortgage. Anybody have any ideas how to finance such a deal?

see comment above 
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Steven Foster Wilson
  • Rental Property Investor
  • Columbus, OH
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Steven Foster Wilson
  • Rental Property Investor
  • Columbus, OH
Replied May 16 2022, 11:10
Quote from @Moshe Romand:

i'm looking at a six unit property in upstate New York. They're asking $200,000, I need like $300,000 in repair and ARV of like $700,000. The problem I'm running into is that a residential broker won't give me a mortgage due to the factor it's multi family and a commercial mortgage broker is claiming that it's too small for mortgage. Anybody have any ideas how to finance such a deal?


Use a HML. Short term construction loans.

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Mike Klarman
  • Specialist
  • New Jersey
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Mike Klarman
  • Specialist
  • New Jersey
Replied May 16 2022, 11:35

A hard money lender will fund this for you given:

1) your credit is decent 

2) comps support the ARV

3) this may be listed as a “heavy rehab” since the rehab budget exceeds as-is value.  They may want to deduct 5% - 10% of you purchase leverage.  

4) you have some fix and flip experience.  Can’t be a 0 for experience on a project like this.

But I’ve done deals like this where the work costs more than the property.