Structuring Financing for New Sober Living LLC (Need capital for second property)

[Ryan Meador]

Hello all!

This year my business partner and I started a sober living home; currently we are operating out of my business partners personal home and we are at capacity with a waiting list. The business is really beginning to take off, we're getting referred clients from several rehabs but just do not have enough beds to go around, so we need another property to expand into.

Let me start by saying there is complete trust between my partner and myself, we currently own and operate two other businesses (solar and roofing) together going back to 2020. 

His home is fully paid off but the caveat is that his parents own the house. They've wanted him to file the deed in his name for years now, but he just has not made it a priority until now. He's generally very very busy in his defense. 

At any rate, before we transfer the deed anywhere, we want to consider all of our options. Initially, we planned on pulling equity from the existing home (conservatively valued at $175k) to purchase our second property. From what I understand, just about any route will require a 6-12 month "seasoning" period following deed transfer.

Again, from what I understand, this includes cash-out refinance and HELOC, and whether we transfer to his name or my name, or to the LLC. I'm not aware of any other options but we're open to anything reasonable that moves us forward, so please lend us your suggestions.

We stand to lose a lot of revenue and some portion of our waiting list in that time, so we're looking for the fastest possible route to close on our next home.

The next property's income (if 5+ bedroom), at capacity, will gross more than twice the expenses, including PITI, utilities, etc. Surely this has to be a bankable venture, but so far I've struck out. Without 2 years of tax filings, we're getting blank stares upon our lending request.

I've been told my credit is "thick" and it's above 800 currently, however, my wife and I want to purchase a new home next year so I don't want any hits on my personal credit just yet.

I understand Hard Money lending is another option but I'm nervous about loan terms that short and APRs that high. Can someone talk me into that route or is it a bad fit for this venture? I gather that hard money is a better fit for flips.

Does anyone know of any way to pull out equity from his home any faster? I know the BiggerPockets crowd are gurus when it comes to creative financing, are there other options i haven't mentioned?

Thanks for any help and advice in advance!