Using hard money on 1st rental (BRRRR) deal
Is this recommended? My thought is that if i understand what I'm getting into and I'm sure i can pay off the HML with a refi, sale, etc i should be set...unless the wisdom of the forums can show me otherwise!
I'm certain i can qualify for a conventional mortgage, but i seriously doubt they will lend against a distressed property. I spoke to a loan officer at a portfolio lender bank in my area and everything sounded on the up-and-up at first, but when i followed up with him a couple weeks later, he told me that "we are holding back on these types of loans right now due to too much concentration" or something. Didn't come off as a reliable source to me (i would hate to get a deal in line only to find out that the bank i thought was behind me has suddenly changed their mind).
So its looking like private lending sources (HML) might be my only option since i don't want to pay all cash either.
Any thoughts??
Thanks,
Most Popular Reply
@Miles Stanley With the small local banks it generally a quick closing, 3-4 weeks tops. They meet as a loan committee after the paperwork was submitted and it was just a yes or no. The paperwork is fairly standard as a big bank loan: tax returns, bank statements, paystubs etc, but the turn around time was much quicker.
Because it's commercial loan, 20 year amortization, resetting every 5 years. One just reset recently and the rate increased 0.25 %.
Your general question: theoretically yes, as long as you're getting a great deal, you should be able to pull out money after the rehab.
- Tom