Will a Hard Money Lender loan money to rehab a property while there is a construction loan in place?
The construction loan/mortgage is for $500k and I need an additional $75k to finish the project, keep up mortgage pymts and sell the condos. Is there any way a HML will loan in this situation.
The ARV of the 3 seperate units will be roughly $750k. I believe the appraisal of the property with the current renovations will be around $600k.
I was thinking if the bank would do somewhat of a “blend” appraisal it would appraise around $650k. Based on that, I could refi with a 90% LTV and get the $75k I need.
because all they will do, is ask you to meet them for a beer after work so you can tell them how you got the $…
If you can pull some more cash into the deal you can pick up your loan…a guy earlier mentioned 70%…just rember to add your loan costs and closing fees if they are going to be rolled into the loan
LTV to HMLs is like credit score is to ILs. Sorry if I was confusing things, but it appeared that you were shooting for a hard money loan.
If I understand correctly, you got:
600k appraised
750k ARV
500K debt + 75K to get your ARV
If you can talk a construction HML to give you 70% on a 2nd then I want to shake your hand…so you are looking at a first of 575K + costs…that’s going to put you outside the LTV box regardless of how you name it… Even if you put the 75K into it yourself, you are still going to be white knuckling it for the appraisal to meet your expectations…sounds really tight…
so how to get from here to there…
1.If you can get 80% conventional, then you don’t need HM
2. Do you have other property? Why not cross-collateralize. Pool it together. Pun intended.
3. Bring some more money into the deal to cover the funding shortfall from the HML.