!00 % Hard Money for Apartment?

3 Replies

I am looking at an apartment selling for 1.3M. It has 4 units, 19 rooms total renting at $700 per month each, with no repairs or renovations needed.

Is it a good idea to accept 100% loan from a hard lender offer? How would you refinance the deal? The banks only offer 80% refinancing.

I'm currently  renovating a second property, and may be cashed out soon. I'm using lines of credit at this point.

Originally posted by @Caesar Barona :

I am looking at an apartment selling for 1.3M. It has 4 units, 19 rooms total renting at $700 per month each, with no repairs or renovations needed.

Is it a good idea to accept 100% loan from a hard lender offer? How would you refinance the deal? The banks only offer 80% refinancing.

I'm currently  renovating a second property, and may be cashed out soon. I'm using lines of credit at this point.

I would be wary of a HML who wants to lend you 100% of purchase. Most of us want you to have some skin in the game.

I would check for 2 things. 

1. What type of interest and points do they offer? I've seen a 100% deal like this with, ahem,15% interest and 7 points at closing.

2. Who will own the LLC that owns the property and are there special provisions that if you don't make payment you are booted off the LLC? If yes it means no foreclosure is necessary you just lost the property and all equity.

@Benjamin Hurwitz

 Let's say the terms are acceptable, how do people pay it back if the bank offers 80% refinance or homeline? How to get the rest 20%, any special loans that can be tapped?