Are there Private OR HML for commercial

General Real Estate Investing
21

The devil lies in the details doesn’t it? :slight_smile:

Refinances with a traditional lender will be no problem. The HML might be able to refinance you into a better loan.

Example:
Your lender use Hard Money to do the rehab. Then after it is done and rented out the same lender then refinances you into a better loan. Fixed at 8% or whatever it ends up being. Some that do HM may not be able to refinance you out, so you would go to a different lender. I think most would be able to handle both loans.

22

Iron range,

In the above post you said that “he HML might be able to refinance you into a better loan.” When you say better do you mean refy you at a better rate than a traditional lender or just present you with perks but at a higher rate than traditional lenders?

23

When you refy, you will be refinances through a traditional lender. The broker you used to get the Hard Money loan may also be able to get you a traditional loan through one of their lenders.

24

Are you asking the max loan amt a HML will lend? or the are you asking what the max LTV they will loan on.

If your question is the max loan then the answer is millions of dollars. If your question is the max LTV then 65% is the max. Some people on this site say they know of HML that will do 70% LTV, but 60% or maybe 65% is much more common. Either way you will want to stay below the requirements. The reason is because if you are trying to buy a $60,000 property that you think is worth $100,000, but the appraisal comes back at $85,000 you will have wasted your time and money. Money being that you paid for an appraisal.

25

Sorry I should have been clearer. I was asking what the minimum loan amount is that they will do. You had said that they only do large loans.

Thanks,
Rosanna

26

It differs by the HML. Some want it to be in the millions, some want it to be in the half million dollar range. I have found one HML that said they will go as low as $30,000. I imagine that is the lowest anyone will go. Even $30,000 is pushing the minimum amount.

The key is to call 20+ lenders and ask them:

  1. Will you do 100% financing (including rehab & closing costs)?
  2. What is the minimum loan amount?
  3. What do your lenders look at (credit, deal, area)?
  4. What states do you lend in?
  5. What up front fees do you require?
  6. What kind of appraisal do you require?
  7. Can you refinance me after the rehab, or do I have to go somewhere else?
27

Iron Range I just sent you a PM.

28

There are several hard money lenders out there and there are many ways to get the deals done. If you are rehabbing the property and lets say you buy for 300K and need 100K to renovate which would bring it to 900K you are i good shape. Most of them are looking for a way to get out from under the loan. This is why they charge so much upfront. If you can get the rehab work done fast enough and get it leased or rented out in a timely manner yes the best thing to do is refinance it. Seasoning on title is not an issue with all commercial lenders as it would be with residential so yes you can refi almost immediately however