Flipper · Round Lake, IL · Member since 2015 · 8 posts · 1 vote
The property that I rehabbed hasn't sold yet in which I had to extend the maturity date with my Hard Money Lender. The problem is that I have to pay an additional 1.5% monthly on top of the annual interest payment which costs a lot to pay for an extension of a loan. I know that banks will not refinance fix and flip loans. Are there any other types of loans of companies that I can refinance with? Your help is greatly appreciated.
Challenge is whether you go with a bank (if you can find one but unlikely for a flip; maybe if you convert to a rental) or HML is the refinance is going to cost money upfront to close it. So you have to ask yourself if you're saving much by switching now vs holding out until it sells.
I think you're bigger issue is solving the sale issue. Why is it taking so long to sell? Price to high? My 4 flips this year have all gone under contract in 2-3 days.
@Jay Roque Banks look at a variety of things with Fix & Flips. "Seasoning" is one aspect. Find out how much seasoning is required when you call lenders.
Challenge is whether you go with a bank (if you can find one but unlikely for a flip; maybe if you convert to a rental) or HML is the refinance is going to cost money upfront to close it. So you have to ask yourself if you're saving much by switching now vs holding out until it sells.
I think you're bigger issue is solving the sale issue. Why is it taking so long to sell? Price to high? My 4 flips this year have all gone under contract in 2-3 days.
@Jay Roque - now's a bad time to ask this question, but hopefully you can resolve the issue.
@Adrien C. raises the best question: why hasn't the place sold yet? This is a "seller's market", and you haven't sold yet? What's wrong with the house, or what's wrong with the price?
You may have set the price high thinking that you would earn a nice profit, but you may have to cut the price a little in order to sell and keep yourself from losing out more money while waiting for the sale to happen.
Have you had any viewings of the house? Any interest? Are you working with a Agent to sell? What are they suggesting?
There are a variety of loan products on the market designed to do exactly what you're doing. The caveat is they are not conventional products and subsequently, they do not have conventional rates and terms. The loans I'm talking about don't necessarily care about your income, only your credit and the property value.
My concern for you is value. Sounds like you've got the property priced way high because houses are moving pretty fast when priced competitively from what I'm hearing. Generally, with the type of loans I'm talking about, you can get 70, maybe 75% loan to value depending on the borrower's credit, but the appraisals are not aggressive so it may be tight.
@Jay Roque do you mind giving us the address & asking price & pictures to get advice on if you are pricing it right? If its not about the money, its about the money. Its always the money, as even the very worst house can sell, for the right price...