How to refinance if unable to get conventional financing

15 Replies

How would someone who is unable to get conventional financing through a banking institute go about getting a project (BRRRR) refinanced? Am I seemingly out of luck? Is my only option to partner with someone who is able to qualify for the loan? Thanks in advance for any responce.

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You would need to be more specific as to what is causing you not to get conventional financing? It may be that you can go with a bank statement type program? Is income, and time of receiving the income an issue? Or you could go with an investor cash flow type loan, where you don't put any income or employment on the application, and the property must rent for the same or more than the PITI payment? I wouldn't know what to recommend, without more details?

If you're having trouble getting the fix n flip financing, you would either go hard money or fix n flip. Both will cover most or all of the rehab with between 10-20% down payment.

If in the end, holding the property is still a challenge due to financing issues, then you can always just sell it? Maybe selling the 1st 1 or 2 will solve the income issues (if there is one) and then allow you to BRRR from there?

To pin down the best course of action going forward, we just need more details?

I hope this helps?

@Sydney Tiffany the short answer here is yes, you can ABSOLUTELY get another loan if income is unstable or the "debt to income" doesn't qualify.  There are plenty of loan types that go off of the income of the property itself and will ignore your personal income entirely.  Lot's of investors use these types of loans and they usually come from smaller lenders.  Feel free to ask anything else if you need. Thanks!

@Sydney Tiffany understood.  Is agency your main gig?  Have you been a 10-99 contractor for at least 2 years?  Have you had consistent income over the 2 years? I’m not a lender, but from what I understand, those are the biggest things they look at when someone has that type of job.  

I’ve met a few hard money lenders that will offer a refinance type of service.  The rates are usually a little higher than the bank, but the ones I’ve met don’t look at income.  They look at how the property will perform.  

Other than that option, a partner is your best bet.  

@Bill Plymouth I am not able to qualify at standard intitutions because of my unique employment situations which is why I had orginally posted. I had not considered Hard money for refinancing. Do you know if they could amortize over 15+ years?

@Sydney Tiffany Hmmm, I might say that the most likely place to find these types of loans are from Mortgage Brokers. That, or your local REI Group. I think there's a couple that meet in Tulsa but brokers seem to always have a good connection to a lender that can base the loan on the property. If you don't know any of those then try to reach out to some smaller community based banks. No credit unions. They won't have what we need. But if you see a community bank, with one location...then that's a good place to start for sure. Hope this helps!

Originally posted by @Sydney Tiffany:

@Bill Plymouth I am not able to qualify at standard intitutions because of my unique employment situations which is why I had orginally posted. I had not considered Hard money for refinancing. Do you know if they could amortize over 15+ years?

Presuming that you have finished the rehab and have stabilized the property, if you are still unable to qualify for a conventional loan refi, consider a (still Hard Money) 30 year fixed, fully amortized loan. Should be able to get somewhere in the vicinity of 6%-8% plus around 2 points.

If you need someone to point you to such a loan provider and we are talking about a SFR (1-4 units), I'll be happy to point you to someone. ;)

PS. Just noticed that your sig seems to indicate that you are an Aussie. Do I have this right? Presumably you are investing in the USA.  If you are not a US citizen or Greencard holder then the above mentioned rates and other terms get more expensive but not impossible.

Best of luck in your endeavors.