Private Lending and conventional Mortgage

2 Replies

Hello Everyone,

I just completed my first deal FHA 4% down - It was a two family in Weymouth Massachusetts. I kept the current tenants in one unit and gutted the other and renovated it and will be moving into it in a week. I will be refinancing, but was told to wait 6 months? Is this true?

I am a property manager and real estate agent and am now looking to buy a bigger building to manage.  I guess I could take money out of my house after I refinance, but was wondering if anyone knew any private lenders that would lend for a down payment for a building in MA or RI???    I'm looking to do a 30 year loan but need the 25% down.  I have spoke with a private lender that will give me a 0% down loan on a building, but in 5 years I either have to sell or refinance the property to pay them off. I am looking to hold it and the refinance option does not really work for any properties I have seen.

Brendan, I am not knowledgeable about FHA or conventional residential financing, but I think you need to meet your FHA obligation, which may involve living in it for at least a year, and the refi lender may want seasoning of 6-12 months.

As for private lenders, getting 0% down for 5 years is incredibly difficult.  If you have it, grab it.  If refinancing in 5 years doesn't work for the project, perhaps the project doesn't work.  You should be able to force appreciation by renovating and raising the rents over time to get the 25% equity, not only normal appreciation.  

I have never ever heard of a downpayment loan (2nd position) for 30 years.  Unless it is from your Grandma.  

Brendan, my experience is that you may need to wait 6-12 months to satisfy the FHA and your future Refi lender's conditions. Private or Hard lenders such as us would not typically finance this deal as we do not / cannot lend on owner occupied properties. I would finish the renovations and see about doing a cash out refinance or HELOC to use some of the equity in the Weymouth house toward a future deal. I know some great banks on the south shore I work with and have done business with on my investment purchases / refis. As far as financing for new buildings, again I could refer you to some great banks that may want you to put down the standard 20-25% or I may be able to assist with more creative finaincing through our Lending company. Reach out if you want to discuss futher. Good luck!