Long Term Private Lenders

11 Replies

Does anyone have experience with some of the longer term private lenders for buy and hold such as Colony American Finance or Lima One? There seem to be very mixed reviews from a couple years ago, and I can’t find much recent experience.


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@Daniel J. do you have an specific questions that we could answer?  Would you be willing to consider some other lenders in the area?

@Andrew Postell The property I was looking at was possibly going to run into some appraisal issues so I was looking for alternatives to traditional financing. I was also just looking into options other than traditional or commercial financing.

I’ve done deals with both of these lenders with 30 year amortization. Both naturally were priced more than a regular bank, as expected. There are in some cases some hoops to jump as to how you can hold the property, in my case one of them had to be in held by itself in an LLC. Lima was a real challenge closing my last deal but I’d give the m another whirl as it ultimately did close.

@Ed Matteson were those blanket loans or just a normal commercial loan? Do you mind sharing some of the terms you got?

Both are individual SFH loans, not blanket or portfolio. I cannot recall the exact IR from memory but the terms were decent.

@Ed Matteson do those count toward your Fannie/Freddie loans? I️f they don’t that’s an easy way around the 10 limit

@Ed Matteson Good to know, thanks! Lima looks overall attractive as a lender, but from what I’ve seen they seem to flake out at the end or take a horrendously long time to close.

@Caleb Heimsoth They do not, these lenders are effectively portfolio lenders using their own funds to lend with. You pay more for them though. Typically you are looking at a point or 2 higher on interest, and possibly points up front as well.

As most said lima has better terms but is a long process and difficult to close. If you Refi make sure it’s been rented for 60 Days verified via payments. If not the terms may change drastically. I had a client with 750 credit score who Refi 7 free and clear Properties. First they quoted him at 75% ltv. Because most of the properties wasn’t already rented and the dscr was under 1.3 it changed to 68% ltv. When I spoke with Colonial the property has to be stable. Rates are a little higher around 6.5% for 5/1 arm. Not sure if you open to other options but there’s some lenders who offer a 30 yr fixed (20 to 30) yrs at 80% ltv and 6.75. Of course you need good credit score etc.

These type of lenders will often have a prepay penalty too. It's usually not awful somewhere cascading down from 5% year one, 4% year two, etc.

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