Over the past year I have been consistently working on my wholesale real estate business and closing deals so I can build capital, experience, and relationships to begin my personal real estate portfolio beginning next year in 2020.
I work for a commercial real estate group doing property management and acquisitions assistance, plus I have been building my knowledge through reading books like "Investing in Duplexes, Triplexes, & Quads" by Larry Loftus. So I have a decent background of the process and where I want to be; but I know I do not know everything at all. Especially when it comes to the process of hard money loans and the refinancing.
My plan is to house-hack a duplex or triplex by buying it with hard money, rehabbing it with hard money (quickly), rent one side while living in the other myself, then refinance with the bank to pay back lender, and have a down payment money for next multifamily opportunity.
My questions are, what amount of interest should I expect with hard money lender with this being my first loan? How much of a down payment should I expect? Where can you find credible hard money lenders (Cleveland, OH)? And how long is the refinancing process? I dont want to pay the high "hard money" interest for long.
I doubt a hard money lender is going to lend to you on a primary residence. There are however a couple of conventional renovation products that you could use, instead.
I think to start out with a FHA loan would be best on your scenario. You only require a 3% to 5% down. Meanwhile save up for a downpayment on a commercial deal. Hope that make sense.
HML that are following the law do not lend on primary residences in 2019.
@Jerry Padilla thanks! I’m interested in learning about those other options
@Riggies B tang thanks! I was considering that but didn't know HML can't lend on primary residence. So I may definitely look to get FHA loan
@Chris Mason thanks! I wasn't aware of that. I'll look into FHA and similar loans
@Jerry Padilla will a HML lend on renovations cost for my primary residence?
BRRR best fits the well-capitalized or well-funded. No an HML isn't going to put a 2nd on your primary to fund renovations. They won't/can't even do a 1st.
Nothing wrong with buying a househack that only needs paint & carpet so you can self-fund and the place will be in good enough shape to qualify for low down bank financing.
Get pre-qualfied. Save up 5% down plus closing costs and some reserves and set aside the whole BRRR for another quiet off--market distressed deal down the road as you continue to learn and get funding sources better lined up.
No, a HML won't want to touch a primary residence.
HomeStyle is just one renovation loan product that you could use for a primary residence.