Funding for an vacant investment property?

Question

Hello all.

So here is the deal.  I have a 1600sqft SFH in Duval county FL.  Purchase price was $16k.  Realtor is giving me estimate of around $70k-$80k, after researching my own comps I feel more confident going with an ARV of around $65-68k.   Contractor rehab estimates range from $25-$32k.   My exit here is to rehab, rent, refi, and hold for 3-5 years.

The issue I'm running into is securing financing for the rehab.  The home is owned free and clear.  Since the home is owned under my LLC, some banks will not do a personal mortgage on it.  Some of the bigger banks require you to hold the home for at least 1 year for they will loan on the ARV (I've only had it for about 3 months).  I did find some possible options with a local credit union and another local bank, but I'm still having to explore those further.

So other than hard money lenders, does anyone know of any mortgage brokers, institutions, or other places to look that might give a 10-30yr loan on this type of property? I'd rather borrow money from the existing equity or take out a low interest secured loan then have to borrow money from a hard money lender and then try to refi later. Any ideas would be greatly appreciated!

Thanks!

Rob Beland · Answer

@Wenecio Godfreyyou should be talking with local banks that have a commercial lending dept. These banks often times keep this type of loan in-house. Good luck.

Darrell Shepherd · Answer

Not most banks, NO banks will do a loan to you when your LLC owns it.  They are two separate entities.  You can put it in your name, get the loan, then transfer it back, or borrow in the LLC with a personal guarantee, but you cant borrow in a name different from who owns it.

Hard to do much under $50k with traditional mortgages/banks and such.  Like Mehul said, time to get creative.  Check your local REIA and see if anybody is cash heavy and wants to do a quickie loan to cover the rehab until you can get a loan to cash them out.  If you've got credit and income a credit union will probably do the loan when its done.  You can check with relatives/friends, etc.   Get some credit cards, etc.

None of the institutional HML's I know of will go under $50k.  Most have minimum origination fees that are pretty steep.

Mehul Mehta · Answer

Form a partnership with an investor :), Use credit card, use line of credit etc etc.

Your availability of finance is limited by your creative thoughts :)

Josiah W. · Answer

yes I know a good source for funding

Funding for an vacant investment property?

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