Line of Credit and WholeSale Lender

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Line of Credit and WholeSale Lender

Thu Trinh
Austin, TX · Member since 2016 · 10 posts · 2 votes

Hi, I just met with Networth Realty here in Austin and am trying to find out how to make it work, when a good multiplex deal comes up. It seems like they do a lot of hard money lending themselves on the deals they offer their clients. They offer a 212 Loan, with a high interest rate (~14%) over 6-12 months.  What are your experiences with wholesaler companies and the ease in transition from the hard money lender to refinancing? 

Instead of borrowing through Networth, can I take out private loans to pay for the rehabbing, then refinance? Is there a seasoning period for refinancing? 

I'll be a first time home-owner, with credit score above 780. Stable job. What is the credit hit each time I refinance?

Also, they mentioned getting line of credit. Would I be able to take out $100k+ for lines of credit? I don't have a good idea of the multiplex (duplex- 4 unit) market here in Austin, so I'm looking for an estimate of what a good run-down property will cost, if anyone has experience. There's not much on the marketplace for it. Sorry for all the questions, I'm trying to go through the forums to put the puzzle together, but I need some help. Thank you all!

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  • Jacob Pereira
    Real Estate Agent · Austin, TX · Member since 2014 · 636 posts · 486 votes
    10y

    Hey Thu,

    A lot of the NetWorth guys are here on BiggerPockets, so I expect they'll probably reach out to you to answer all your questions better than I can. I'm in the process of closing a deal with them, but I'm doing all cash, exactly to avoid all the issues you're discussing. When you have cash it's as simple as wiring the money over and signing a few documents.

    That being said, they don't care about the source of that cash; if you just borrowed $100,000 (probably closer to $300,000 for an Austin multi-family) and gave them that money, it's the same to them as if you'd taken it from savings. The issue there is that you need to make sure that you have the money available quickly, and a lot of lenders move slowly.

    The credit hit on the refinance is minimal; it'll reduce the overall age of your loans and add an inquiry to your file, but that's really nothing compared to your ratios, a clean record, etc.

    I'm guessing your multifamily question is in regards to the duplexes in 78758 that some of the wholesalers are marketing right now? Without having been in them, they seem like they're reasonable deals for the Austin market. You certainly can't get the 70% of ARV in this town any more, so if you're following BP rules of thumb you're not going to find anything. for comparison's sake, I have a duplex in 78758 that I estimate I could sell for about $300k. Also, their literature always has comps on them, and while I'm sure they pick ones that are favorable to them, they're pretty accurate. I haven't seen NetWorth release too many multifamily offerings, though.

    As far as refinance, I don't have direct experience with it, so do your own research, but I've heard there's a 6-month seasoning period.

    I hope this helps, and good luck!

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  • David Schwan
    Manchester, TN · Member since 2016 · 67 posts · 9 votes
    10y
    For the refi most banks are looking for 10 to 12 month seasoning period.
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  • Thu Trinh
    OP
    Austin, TX · Member since 2016 · 10 posts · 2 votes
    10y

    Thanks guys!

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