Updated over 9 years ago on . Most recent reply
Rental Financing
Can anyone recommend a good long term take out financing option for us to pay off our bridge financing and hold real estate as rentals in Chicago? We would prefer not a conventional lender. We are familiar with B2R and Lima already. Thx!
Most Popular Reply
You've found the gap in lending. Conventional is great if you qualify, but the hoops are difficult and many people do not. Hard money is expensive with points and usually 12% interest. A market has emerged recently with Lima One, Peak Asset, Visio Lending, two of which I'm a broker with, but haven't sent any loans to them because there are still too many hoops to jump through, and pre-payment penalties for up to 5 years, and the rates aren't really that great, unless you are someone that could almost qualify conventionally.
So, what does it leave you with . . . a gap that is still needing to be filled. A gap where the rate is good, the term is decent (maybe 10 years) and the fees are lower, but you can avoid income, credit and appraisal requirements. I lend private money, and can avoid most of the hoops, but I don't care to drop my rate, extend my term and lower my costs.
I don't have any solutions here, other than I will suggest that you go with the best level of financing you qualify for and don't miss out on buying while you look for something that doesn't exist. Also, check with your private money sources (family, friends, associates). I bet there is someone you know that may be able to finance your deal short term. Good luck!