All Forum Posts by: Account Closed

If you purchased the properties with loans, commercial lenders requires 3 months seasoning. If you purchased with cash, they requires 6 months seasoning. The rates are around low 5s' for 30-year fixed, plus 2-3 points.

@Evan Scott 6-plex would need to go with commercial loans. Commercial loans deal with business entity as borrowing entity. The partnership is taken care of in the operating agreement of the business entity. The refinance process is the same whether it is one person or multiple people. Just need to collect the information from all the guarantors. 

@Tyler Carraway Each private money lender and hard money lender has their own lending criteria. Generally speaking, they require two sets: 1) property wise, the deal needs to be profitable and fit their lending box; 2) borrower wise, the borrower needs to meet some minimum requirements, mainly about credit scores and experience level. 

For fix and flip loan, some lenders doesn't require minimum credit score, and some can even work with first time flippers. Interest rate looking at 8-10% with 1-3 points.

For long-term rental loan, most lenders require minimum 620 or higher credit score. They may require experience or not. Interest rate looking at 5-6% with 1-3 points.

It's better to call lenders or brokers to discuss your specific needs to get a better quote. Hope this helps!

@Evan Scott You can do a cash-out refi to get your capital back. If you improved the rent, the appraised value should increase. How long have you been owning it? 

@Shakir Evans, there are two types of hard money loan. One is the for short-term like fix and flip, bridge loan. You pay interest only during the loan period and pay off the total loan amount at the end. Say $100k loan 10% interest for 1 year interest only payment option, you pay $10k/12 = $833 interest each month, at the end you pay $100k. Second type is long-term loan like 30-year fixed for stabilized rental property. This requires the property to be in livable condition and a tenant in place. The rent income should be able to cover the expenses and also service the loan. The rate is around 5.5% now and payment is P&I equal payment. Hope this helps you.

For first time flipper, you probably get ~10% rate and 2-3 points. If you credit is good, you could get 80% of the purchase price plus 100% of the rehab cost.

How rural is it? I may be able to help you.@Aimee Haasteaby

@Hobart King, For the financing part, 1-4 unit still considers residential properties. 5+ considers as commercial. For this case, I would see a fix and flip loan is good for you to purchase and renovate. You can get 80% of the purchase and 100% of the renovation for 1 year. And during this one year, you pay interest only. After renovation and stabilize with tenants, you can refinance to a 30-year fixed loan.

What is the current value of the house after repairs? For cash purchase, most lenders require 6 months seasoning and of course, a lease in place to do cash-out refi. There are lenders can do 75% LTV for 30-year fixed.

1. the financing portion can be better. 20% down, 5.5% on 30-year is possible

2. the expense ratio 50% may be too high for this small house. Do you have the actual numbers?