Hello. Hey does anyone know how those Hard Money Lenders that will allow you to refi and hold a rental property work? I have a client who's trying to build a rental portfolio.
@Rashad S. this is how it works. The HML lends on the purchase and rehab of the distressed property (not turn key). Once they are done with the rehab, they can refinance out with a conventional lender. Couple things to note:
1. the HML may want to see that the borrower is preapproved with the refinance lender prior to getting into the deal.
2. the refi lender can't be just any bank. Best options are someone that is direct to FannieMae or a smaller community bank.
We do this strategy all the time with borrowers, unfortunately we are only in MN and CO as of now.
Hey thanks! Yes I need one that lends in Georgia. So the Hard Money Lender does not have a connection with the refi lender? I figured it was more like a one stop shop "Program"
Are you trying to find a hard money lender for the refi, or asking how the existing hard money lender would allow a refi? If the latter, then it's not really any different than a normal conventional refi. Just take it to closing and let the attorney/escrow handle the transaction from there (and order the payoff).
If you're trying to find a lender for the refi in your state, try to go conventional if you can; those are going to be your best terms. If your client can't qualify for a traditional bank loan, PM me and I can help you with some secondary / non-conventional lenders.