Need commercial lending advice!!

8 Replies

Here is my situation.  I invest in rental homes mostly.  I have exhausted my 10 FannieMae/FreddieMac loans at this point with both single family rentals and a duplex.  I am a physician with excellent personal credit, so qualifying for loans up to this point hasn't been a problem.  We have a couple LLC's set up that we use for our rental properties.  We are considering partnering with a local (Houston, Texas) builder to construct a duplex now, and then afterwards a triplex.  The builder/developer currently owns the land.  What I need is a lender to provide construction loan for the construction of the duplex, and then upon completion of the duplex, to roll it into a mortgage.  Then I will want to repeat for the triplex.  I have reached out to multiple lenders that I know and keep getting the response that they don't handle those types of loans.  I think I must be looking in the wrong places.

Can I get some advice?

Thanks!

@Darrell Wallace How long is your construction time frame? I have an excellent lender but again I dont think a traditional lender would do this. It seems like hard money is your best bet if you can qualify for a regular loan after I don’t see why not. But then again your timeline is very important. I’m sure their are hml for 9 month periods.

@Darrell Wallace

Another Physician here. Did you look into physician loans? Most of these are portfolio loans and do not count against Fannie/Freddie limits. Not sure if they will finance construction but you never know until you ask. If you want a list of physician loan lenders that finance multifamily deals let me know

@Darrell Wallace not trying to be a smart ***, but if the builder already owns the land & I assume will be the one building the property, why would they want to partner up? There are construction loans in the private lending world that requires 10% down of total costs (land purchase + construction cost) and if land is already owed can count the purchase price of land towards the downpayment. 13 month, interest only loan.

Originally posted by @Joel Lopez :

@Darrell Wallace How long is your construction time frame? I have an excellent lender but again I dont think a traditional lender would do this. It seems like hard money is your best bet if you can qualify for a regular loan after I don’t see why not. But then again your timeline is very important. I’m sure their are hml for 9 month periods.

 The construction of the duplex will be about 3 months. Yeah, I was thinking about hard money lenders.  I've never used a hard money lender.  Do they just essentially provide all money up front (minus your contribution) and they have a first lien against it, just like a mortgage company would?  And then when the project is completed, use a commercial lender to put a new mortgage over the whole thing, paying off the hard money lender?  Do the commercial lenders require any seasoning period after construction is complete and tenants are in placed before doing this?

Originally posted by @Fidelis O. :

@Darrell Wallace

Another Physician here. Did you look into physician loans? Most of these are portfolio loans and do not count against Fannie/Freddie limits. Not sure if they will finance construction but you never know until you ask. If you want a list of physician loan lenders that finance multifamily deals let me know 

Sure, that would be great!  Can you PM me the physician loan lender contacts that you have in mind?  Thanks.

 

Hi Darrell! I'm in Houston and building duplexes with a builder. I've been able to work with Allegiance Bank for my construction loans. The loans are considered commercial and are in the name of my LLC. Hope things work out for you!