Is there a financing solution for this?

8 Replies

I bought a fourplex in Dec.2013 for 100,000 and put 20,000$ down. I obtained a private mortgage @ 10% for 80,000$. My building later appraissed for 183,000$. I have a 5yr term with the private lender that really just started. Is there any way to access the equity in this building or am I dreaming in color?

Being north of the 48th, I have no idea what the finance guidelines are there, here, after one year a refinance will be based on the appraised value. Best to ask your bankers in your area as to their loan guidelines. My guess is that you're not dreaming, my other guess is that your contractor isn't an appraiser and may be off on his assessment, but he could be close. :)

It was an actual appraisal but I do believe that it was higher than what it should have been as there were many deferred maintenance issues that may have gone unnoticed such as a roof in very poor condition (covered in snow so there appraiser probably didn't notice how bad it was).

No conventionnal bank wants to give me a HELOC as they don't hold the mortgage. A private mortgage lender holds the mortgage so I think I'll just have to wait 4 and 1/2 more years and refinance or sell.

Why not just refinance the private loan entirely?

That is a possibility however the interest rate is 10% and I would no longer have positive cash flow

It is possible. Are you interested in refinancing out of the private mortgage for a lower interest rate?

Yes Jerry, thats exactly what I'd like to do

Nathan, there should be no reason you cannot refinance using the new appraisal. Most non owner occupied loans are 75% LTV.

One thing to be aware of is any pre-payment penalty for getting out of the private mortgage before the loan comes due.

I can help with the refinance. Contact me at [email protected] or call 877-514-8238

Nathan,

Is your rental property located in the USA?  If so do you also work in the USA or did you get a loan under a foreign national program?

Or are you an American working in Timmins, Ontario, Cananda?

I just need a bit more information in order to give you my opinion on how to go about doing this refinance. 

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