All Forum Posts by: Ronan M.

Wish I could help @Brie Schmidt but when that time of year comes its still just me with my shovel unfortunately :(

But I will ask around and see if I can get some contacts for you.

As a PM you are beholdeth to the owner. Not your assistant manager.  Do what is right for the owner and for the running of the business. And with what you have described you are doing just that. 

You state you are looking for conventional terms of 4% 30 yrs. HML wont give you those terms. You need to keep searching for conventional lenders.

Looks like one of those Darlik things from Dr Who. I'd call the Men in Black I think if I saw one of those things coming around the side of my house ! 

@Sonny H. you might...assuming that the house is now worth and appraises for the $450K which you stated in your earlier example.  

But you still owe $90K to your Hard Money Lender for the rehab. And if he gave you $90K to rehab you probably owe him closer to $95K to close that loan.  

@Lizette Perez

Its not that's it is unwise to use HML for buy and holds its just "wiser" to explore all other from of conventional financing first.

Once you close with a HML the clock is ticking. Assuming you went the HML route because you were unable to get approved for conventional financing, will you have shifted the needle sufficiently with your finances in 6 months to then get approved for conventional financing ??

For example say you are not approved for $300K for a 3Flat by your bank due to poor DTI, or insufficient reserves or a poor credit score. So you buy the 3Flat with a Hard Money Lender with a 9 to 12month term. After 6 months you want to refi out of the Hard Money and their high interest rate and get regular bank financing. If you still have poor credit, poor DTI, tight reserves etc you might still not get approved for your refi. That's when it can become tricky as your have the balloon payment to the HM Lender fast approaching.

However...if you buy that vacant 3 Flat, rehab it, get all units rented and leased up then quite possibly you might be able to move forward with conventional financing based on your now stabilized income producing asset.  But just remember, using Hard Money for this example is expensive. On my $300K example above it will most likely cost you about 10K to 12K.

If your deal is good enough and the extra $12K is still getting you a well priced property that will cash flow then this route might be better than no deal at all.

But I would hussle with as many brokers and bankers first to try and get a decent long term loan before going to HML which should be a last resort.

I have a great Insurance broker. He is good with that area. Will send you a PM.

@Sonny H.

No the first house is not paid off !!!    if you cash out $315K you have a $315K mortgage owing to the bank that cashed you out.

You got your capital back, (your $220K purchase and $90K rehab) which you pay back to your Hard Money Lender if you used one and you have $5k left over.

And that's a very simplified version. That $5K (and probably more) will most likely go to the Hard Money lender that gave you the initial purchase and rehab funds. They are not giving you that for free.

You do NOT have a paid off property. But you have a stabilized asset with conventional long term financing.

Welcome @Lizette Perez

Sounds likes "right place right time" for you so far in your RE career. Congrats.

The OP says he is facing another court case therefore I assume the time for treating the other party "well" has run its course.