What Would a Hard Money Lender DO?

Discussion in 'Private & Conventional Lending Discussion' started by Gomer, Feb 4, 2015.

  1. Gomer

    Gomer Well-Known Member

    Feb 2014
    Likes Received:
    Hello all.

    I'm interested in knowing what experienced investors might contribute here. The situation is hypothetical but with real world examples everywhere I'm sure.

    The property: multi-family apt. or commercial property, established, verifiably stable location, generating income, can be had for less than market value

    The basic thought for the deal: hard money loan to purchase the property then refinance using the income and any equity in the property as collateral

    The buyer: good credit, fair credit or no credit (could be anybody really), maybe with bankruptcy, employed but not earning enough to throw much if any into the deal

    - would a hard money lender loan up to 75% of appraised value
    - would a hard money lender ever defer the first month interest payment
    - would a hard money lender accept the equity and income from the property as collateral on the front end of the deal if the refi was a sure thing

    Bigger Question:
    - What other kind of creative financing strategies could be employed here?

    We see these types of situations all the time. It seems to me that the one thing that is usually missing is the immediate cash flow & equity in this type of property. I'm really curious as to how that could be used to facilitate a creative deal structure both with a hard money loan and with a refi. I've talked with several mortgage brokers that like the refi part of the deal. Now I'd like to know what the front end lenders think about it.

    Any other thoughts on this type of deal that I'm overlooking?

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