Having trouble getting a 3rd position hard money loan in CA on an investment property (30-50 thou). I have equity, I can’t do a traditional loan until I pay off debt and improve credit. I need the money for about a year but I am not having a lot of luck. Any ideas would be appreciated. I think that it is not enough money for loan brokers to bother with.
1st - 76,000 at 5.25%
2nd LOC 52,000 at 3.175%
Do a cash out new 1st trust deed at 3.75% owner occupied and take out up to $87k at 75% LTV or get a new private money loan with cash out or hard money loan with cash out either owner or non owner occupied!
Or borrow money as a 2nd TD and pay off the HELOC loan with cash out!
Hard money lenders really like 1st position and sometimes may loan money in 2nd position but won’t usually loan more than the 1st in 2nd position.
I have a 20 year loan through Ally, procured through the dealer at 4.25
Third position loans are undesirable to most lenders…if it were me, I would create a wrap including the amount needed at an attractive rate, then sell it to a private party who has an IRA or Pension that can purchase. The closing would pay off 1st and 2nd, and then the wrap would become a first mortgage and be attractive, especially if you offer a good interest rate on the new mortgage. An added incentive would be a refinance guarantee within a short number of years (ie: 3, 5, 7) where the pension owner can see return of principal in full.
There are over $7 Trillion sitting in pension plans and IRA’s and those funds are available for the asking for a deal like this…make it work…make it a wrap that becomes a first mortgage…even an institution would purchase such a note if the LTV was attractive.
I’ve funded hundreds of deals over the years with IRA and Pension Funds…you can too.
Hope this helps.
Third position is a hard sell, can you organize a bigger loan and pay off the 1st and 2nd position?