Are there Private OR HML for commercial

[Iron Range]

Also, wouldn't it be difficult to find a lender that would give you 100% financing only 2 months of owning a property even if it was purchase at 60- 70% appraised value? 

Yes, it would be close to impossible to do a 100% refy after only 2 months of owning it (although I have done it twice). You get it for 60%, then you refinance at 70,80 or even 90%.  But not 100%, that would be very difficult today. 

Example:
$100,000 property for $60,000(purchase price + rehab + closing costs). Then refinance at 80% or $80,000 and get the $80,000 - 60,000 = 20,000 (minus refy closing cost) cash back.

[The DC Group]

What I was actually refering to in regards to the refy was 100% refy of the owed value.  Not 100% appraised value of the building.

For example...

*Initial hard money financing:
purchase price: $500,000
rehab: $120,000
closing costs/carring costs for a few months: $60,000
TOTAL: $680,000

Building is now worth say $1,000,000.

How difficult would it be to find traditional financing for 100% of the owed value ($680,000 or 68% LTV) with a traditional lender after a few months?

Or, would you have to refy with a HML?  If so, what kind of a rate would you then be looking at?

[rose1]

Rich,

What is the threshold loan amount for your HML contact?

Thanks,
Rosanna

[Iron Range]

A traditional lender won't have a problem refinancing with two months seasoning as long as it isn't 100% of the appraised value.  Refinancing is a little different then the initial purchase.  The interest rate would depend if you refy at 70,80 or 90% of the appraised value for the refy. 

If you owed 68% or $680,000 on a $1,000,000 property, then it would be pretty easy to refy the $680,000 into a fixed interest rate.  If you didn't want to pull any money out of the refy like your example then it will be no problem. 

[The DC Group]

A traditional lender won't have a problem refinancing with two months seasoning as long as it isn't 100% of the appraised value.  Refinancing is a little different then the initial purchase.  The interest rate would depend if you refy at 70,80 or 90% of the appraised value for the refy. 

If you owed 68% or $680,000 on a $1,000,000 property, then it would be pretty easy to refy the $680,000 into a fixed interest rate.  If you didn't want to pull any money out of the refy like your example then it will be no problem. 

When you say it will be no problem are you speaking in regards to refinancing with a traditional lender or HML?

[Iron Range]

The devil lies in the details doesn't it? 

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. 

[The DC Group]

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?

[Iron Range]

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. 

[Iron Range]

Rich,

What is the threshold loan amount for your HML contact?

Thanks,
Rosanna

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. 

[rose1]

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

[Iron Range]

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?

[Frontier Investing]

You can definitely use a HML for large buildings.  I was pre-approved for $1.5 million dollar building with no money down, roll closing cost into the loan, and even roll the first 6 months of payments into the loan. 

Iron Range I just sent you a PM.

[Marco Davis]

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