I currently have multiple properties that I'm looking for hard money to rehab. My problem is both projects are under 50k each. I can't seem to find any lenders that lend under 50k in NY. Does anyone know of any lenders that will?
Are you a member of your local REIA? I am sure there are HML there and if not, someone in your REIA has a solution. Best of luck to you!
@Keenon A Trevor did you try this post in the New York forum? You might have more luck there. Or as the other post suggested to speak with some people at a local Real Estate Investor Networking group.
Most HML's won't lend under 50k because it's not worth their time and they won't make enough money on the points, so offer them something that will make it worth their time. Find out what their minimum is as far as lending, if it's 70K and they charge 3 points that means they want $2,100 in points...so offer them $2,100 in points for the $50K loan. They are making the same on less money and it's costing you a bit more but if you need the money to make more money then it's just a cost of doing business.
Hope that helps!
I had the same problem when I bought my duplex under 50k (24.5k to be exact) We ended up buying the property with money we saved up and gap financed the rest through a family member. We're happier with that move rather than if we went HML.
@Priscilla Z. , that's a great suggestion to offer hard money lenders the points they'd charge on their minimum loan amount to consider doing a deal under $50k. When financing options are limited, especially with lower loan amounts, it pays to be creative and resourceful.
And of course, @Keenon A Trevor , going the private lender route is always an option. Although it may require the time and effort of finding and establishing a relationship with someone willing to lend you the money. Best of luck to you!
Are these projects Fix and Flips? if so send me a PM
@Keenon A Trevor Most HMLs won't do loans under $50k as you mentioned... HOWEVER since you have multiple sub $50k properties, many HMLs will bundle them into the same loan. They get a reasonable sized loan and you get your properties financed. Try asking a few local lenders about that.
Points are just one of the fee's lenders charge you also have junk fees .. and to stay in business as a lender no matter how you get there combination of junk fee's and points or just points or just junk fees. one needs to make 4k a file.. minimum to stay in business.
so with ultra small loans just have that thought process up front know that its going to cost 4 to 5k to get the loan.. there should be enough juice in the deal to allow that .. if there is not then its no deal anyway.. if the deal does not make it because you want to pay 2,500 and can't handle another 1,500 step back.. @Jason Hirko this is my Niche.. once folks realize this we can rock and roll..
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