Myself and 3 partners are trying to invest in a triplex.
We have owned one quad since September 2020 where one person is the mortgage holder. The plan is to refinance this property in September 2021 into all of our names if possible.
1 partner has been furloughed on and off since March 2020 but was most recently on payroll July-September 2020 and furloughed again since
2 partners have been furloughed since March 2020 getting back to work March 2021
1 partner has had her job throughout with no furloughs
We want to continue investing and found a triplex for $327k that we can bring to an ARV of about $415k after about $20k of work.
We wanted to try and get an investment loan and use private money for our Down Payment and Renovation but we are having trouble getting funding because of the furloughs.
How would you fund this property?
We have asked the seller if he would seller finance to us and he said only a small portion (possibly the down payment).
Thanks for any advice in advance.
Hey @Whitney West (again haha)
My first thought would be to have the same person that got financing for the quad get financing for the tri. If they are one of the furlough'd folks, perhaps the individual who never got furlough'd would qualify with a gift from the rest of you. Either way, chat with the loan broker I just referred you to via dm. If there's a way to do it conventional, he'll find it.
If that does not work, your best bet would be hard money. Most HMLs lend on the asset more so than the borrower. If it has strong numbers and you all have the down payment plus decent credit score, it shouldn't be an issue. Then, you can refinance when the asset is more stable and more of your team is back at work.
Hope that helps a bit. Please, reach out anytime if you have other questions or just want to chat!
@Whitney West . There are asset based lenders for long-term holds. You'd be looking at 5% interest for 30 years vs. 4 or 3%. They underwrite the property, so it must cash flow, etc. Credit must be ok, but your income is not considered.
Also, while folks are furloughed, probably shouldn't be buying up multifamilies unless you're going to move in and save money.