Updated almost 10 years ago on . Most recent reply
Private Funding
Good afternoon, I am looking for a private lender for my mini mansion in Western NY. This will be a primary residence purchased by my LLC. 39% LTV and a ARV of $260k. Longer term is sought with a 5 year balloon payment. Home has TONS of equity and offering first lien, This seems to be an impossible task. Can someone please steer me in the right direction. I've already been approached by 3 scammers on Linkedin and Connected Investors. Already lost $1,880.00 because I was stupid. Thanks,
Bryan
Most Popular Reply
Sounds like you are venting about the venue when you simply don't have the experience to know how things work.
Private lenders generally don't hang out online looking for people to loan money to they don't know. A private lender is someone with private funds willing to loan you money, but its more like a relative or friend or associate. There are not any "private lending" businesses by definition. Once they go into the business of lending money to people they don't know its no longer "private", right?
Most hard money lenders can't lend you the money because you want to live in it. Rules are very different for residential lending than commercial lending.
Why cant you get a traditional loan on the thing? Your options once you go past that are pretty limited if you want to live in the house and expect anything close to FHA rates. If you are borrowing in the LLC does the LLC have any assets or income? If you want to borrow money in an LLC from anyone that knows what they are doing, the LLC has to have the ability to repay the loan.
This idea that there are a bunch of people out there just dying to hand over hundreds of thousands of dollars to people they don't know is a falsehood. If you had a rehab deal at 37% that would cash out in a few months I'd offer to do it with you in an instant and bring all the money. You wanting $260k of someone's money for 5 years so you can live in a house you can't fund traditionally is a different animal. There's just no market for that. It can be done, but its something you have to create. If you don't have a strong relationship with someone worth a lot of money its just not going to happen privately IMO.
Assuming you don't have a rich uncle, that puts you into using institutional money and you need to know the rules they play by. There are very strict rules on residential loans these days. Nobody wants to mess with them except banks and FHA. The secondary market for residential is very, very limited.
If you need some guidance give me a call, but know you are running into trouble because of what you are asking for, not because people here don't want to help.
You could look at LimaOne's rental30 loan. You can do that with no money down at that LTV in an LLC. They will want a 620ish credit score and need to see two years of tax returns. Rates are in the 8's right now I think. You might could borrow it in the LLC and rent it to yourself. Not sure what the law would say about that one. Bill Gulley probably knows the answer to that, I'm just kinda brainstorming. I'd wager a bet that even if its technically legal the lender wouldn't want to risk butting heads with regulators over one loan. Anyway, that's not a loan I broker, but do know those guys and they are the real deal. www.limaonecapital.com if you want to look it over.