Hard Money Loan Options

[Brennan Bogdanovich]

Hi all,

I am looking to buy my first rental property and I'm excited, but understandably a little overwhelmed, during the process. I am looking to do the BRRRR strategy and have called about 45 community banks here in Atlanta. None are doing investment loans right now where they can also lend on construction. Hence, I am looking to a hard money loan for the whole project. After calling quite a few hard money lenders, I am seeing two prominent options. What is your opinion on the better of the two below options?

1. Will lend on 80% of property purchase + 100% of the construction fee. 

2. Will finance 100% of the whole project with 65% LTV of the ARV.

Thanks!

Brennan

[Bronson Massas]

@William Harvey is right, #1 is going to be better for most deals, but if you're finding properties significantly under market value, #2 will give you the option to finance 100% of the project which is pretty unbeatable. Something else to keep in mind is that points and rate will likely be higher with lenders offering #2. And @Whitney Hutten, my company is PML so not directly what you were referring to but we are able to finance 80% (and 100% Rehab) to first time investors right now if they have decent credit. Also, many lenders who offer the 80/100 structure (#1) can offer higher LTPs, which can allow them to compete with lenders like #2 for properties being purchased under market value.