Earlier this year I purchase a 10 unit (10 SFH) property in Maryland. I've been working on the past couple months and have the first unit about ready to rent. I had initially planned to finance the rehab with cash and creative financing (lines of credit and such), and then financing it all through a bank. That's still an option, but it will be a bit tight, so I want to find out who might provide a bridge loan or landlord financing for this property. I've been looking around at a few and it seems many will only lend on multi-family up to 4 or 6 units, and many don't fund for rehabs. I currently own two rentals in Virginia as well, so would be interested in a portfolio loan and working with a single lender (if longer term). Thanks.
I'm curious if you've considered other strategies to improve your cash flow that would eliminate the need for a bridge loan potentially? If you purchased / renovated/ expanded the properties you're speaking about in the last 10 years, you might want to consider a cost segregation project. Cost segregation typically increases your cash flow by approximately 3-8% of the total cost of the real estate assets. So for example, on a $1M property, I'm likely to find $30,000-$80,000 in savings, after tax. You typically reap that full benefit over approximately 3 years. I'm not trying to be a gross salesy person - but you should check out this strategy if not with me, with someone else. Good firms don't charge a fee unless they deliver savings to you, so there is no risk to you in exploring cost seg as an option. 90% of eligible businesses aren't using cost seg, because they don't know about it.... Good luck! I do a lot of work in Bethesda, MD - so I know there are many qualifying properties in the area you're describing. Christie
@Ben S. I definitely agree with @Christie Ellis about the amazing benefits of cost seg, especially when doing rehab. An expert cos seg provider will do a cost seg study taking the depreciable basis of the purchase, accelerate the depreciation of 5 and 15 year property, then write off everything you replace in the rehab, and do another cost seg upon completion, doubling your tax savings.
In terms of bridge -loans for this type of project, you may have to submit to high interest rates in order to make it happen. What is the overall cost that you are looking to finance?
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