Private Money for Buy and hold a good move?

Question

I am a new investor in the St. Louis, MO market. I have been doing a lot of research about real estate investing. I currently have my eyes on a few multi family properties but I do not have the funds to finance these deals. I have heard quite a lot about hard money lending and I was wondering if anyone could be so kind as to point me in the right direction as far as finding a private or hard money lender to finance the deal. Also would it even be a good idea to so because these are buy and hold deals not flips.

Jay Hinrichs · Answer

HML these days do have buy and hold products @Aaron Klatt  in the 7 to 8% range..

Visio is one they are out of TExas   LIma One has some too they are out of Charlotte.

but just because its hard money you still have to qualify just like a bank loan .. these are fico driven and equity and ability to operate driven just like any loan.

Chris Clark · Answer

Well yes my thought was to refinance at the end of the loan term. One deal is already cash flowing with tenant in each unit paying $1000 a month each. The total price for the property is $69,000.

Account Closed · Answer

As a private lender, I'm always weary of a buy and hold investor looking at hard money.  I have to ask, why can't you get conventional financing, how is it your deal still pencils with expensive hard money.  Of course I'm happy to get long term money at 10-12%, but long term hard money for a buy and hold ... something is not right.

Having said that, there are deals where hard money makes sense for long term deals, but that's not the standard.  I have one loan going right now for over two years at 10%, he is a very experienced investor with a property in a high demand vacation spot so it makes sense.  In general it doesn't make sense.

Aaron K. · Answer

No the interest rate will be far too high for it to make sense the only time it would make sense would be short term and if you plan to refinance, which at this time it would appear you do not have a clear path towards.

Private Money for Buy and hold a good move?

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