Lima 1 Capital or Conv Loan with Heloc for Rehab

Private Lending & Conventional Mortgage Advice
3yFollow

Lima 1 Capital or Conv Loan with Heloc for Rehab

Erik Dofelmier
Member since 2023 · 42 posts · 17 votes

We are under contract on a duplex that we are going to rehab. My current plan of attack is to use a conventional mortgage I'm already approved for on the initial loan, and then use part of my HELOC to pay for the rehab. I've still been shopping around to find other potential sources of lending, and my local bank mentioned I should check out Lima 1 Capital. Has anyone had any recent experience with this company? Is this something you'd recommend for a first-time investor for a rehab loan? They said I would use their "Fix N Flip" loan (13 months, interest only, funded 100% of the construction costs on a reimbursement model), immediately followed by their long-term rent loan (30 year fixed or 10/1ARM, Cashout Refi up to 75%). My plan is to basically BRRRR the duplex. Therefore, my current plan is to finance the rehab with the HELOC, then immediately refinance to pay back HELOC funds. That said, would there be any significant advantages going with the L1C loans versus using HELOC funds if I aim to refi immediately? Thoughts, advice, opinions? Thanks!

0Reply
13 views

5 Replies

Jump to latestLatest
  • Jonathan Taylor SmithBusiness Member
    Rental Property Investor · Durham / Raleigh (Triangle), NC · Member since 2015 · 840 posts · 801 votes
    3y

    I have used Lima One, and would/will do so again in the future. However, if using them is right for your situation depends on what the money cost will be with your stated PLAN-A. Also, what would be the potential opportunity gain if your conventional loan and HELOC remain available for another property by going with Lima One here? Also consider the likely difference in closing costs.

    Blue Chariot Realty & Management4.915 Reviews
    WebsiteView Page
    0Reply
  • Erik Dofelmier
    OP
    Member since 2023 · 42 posts · 17 votes
    3y
    Quote from @Jonathan Taylor Smith:

    I have used Lima One, and would/will do so again in the future. However, if using them is right for your situation depends on what the money cost will be with your stated PLAN-A. Also, what would be the potential opportunity gain if your conventional loan and HELOC remain available for another property by going with Lima One here? Also consider the likely difference in closing costs.

    Thank you, good to know. As of now I feel that the conv loan process may be too far along to stop. I guess on the flip side of the coin I could use L1C as another avenue to pursue for another property post closing. 
    0Reply
  • Doug SmithPro Member
    Lender · Tampa, FL · Member since 2013 · 2k+ posts · 2k+ votes
    3y

    I actually know them well. We sometimes speak at the same conferences like IMN. They are good people. I only know them for their longer term rental stuff and we just did beat them out on a ground up construction deal for an investor (you win some, you lose some). Our private equity partners have used them with no issues. I'm not familiar with how they are with flips as I've not been involved with them for that side of things. That being said, they are legit and a good, upstanding member of the lender community.

    0Reply
  • Sasha MohammedPro Member
    Lender · Costa Mesa, CA · Member since 2018 · 337 posts · 245 votes
    3y

    Lima is not a bad option but there are better options out there for F&F. I would recommend you reach out to an experienced broker, specifically an investor-focused one, who has these relationships and can guide you toward the lender best suited for your needs. 

    Which is a better strategy? Really, you just have to do the legwork to compare to determine which is going to be a better deal - your self-funded HELOC, or using Lima's capital (or another similar lender specializing in F&F).

    Personally, I would be hesitant to utilize HELOCs just due to their adjustable nature. You're introducing more variability into an already variable market/ project type. That's not necessarily my preference for risk tolerance, but to each their own. 

    [email protected]949-351-1338
    0Reply
  • Erik Dofelmier
    OP
    Member since 2023 · 42 posts · 17 votes
    3y
    Quote from @Sasha Mohammed:

    Lima is not a bad option but there are better options out there for F&F. I would recommend you reach out to an experienced broker, specifically an investor-focused one, who has these relationships and can guide you toward the lender best suited for your needs. 

    Which is a better strategy? Really, you just have to do the legwork to compare to determine which is going to be a better deal - your self-funded HELOC, or using Lima's capital (or another similar lender specializing in F&F).

    Personally, I would be hesitant to utilize HELOCs just due to their adjustable nature. You're introducing more variability into an already variable market/ project type. That's not necessarily my preference for risk tolerance, but to each their own. 

    Thanks.  The HELOC has the ability to be locked in at a fixed rate, so I was planning on that.  
    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free