Financing options for investment property

Lyft
ML3QX8

Go to company page Lyft

ML3QX8
Jun 26, 2021 6 Comments

Scenario: currently working on fixing and flipping a primary residence, which will likely need an additional 2 years to complete and sell. A property I had been watching that I just missed out on buying last year hit the market again - great potential but needs $2M in rehab, money I don’t quite have while I’m still flipping my current primary residence.

The plan is to buy this new property and finish and sell current property soon so the sale proceeds can be rolled into the new one. But over this 2 year period looking to minimize baseline ownership costs while I carry two mortgages.

For those of you who do quite a bit of real estate investing, what financing options are available and would you recommend? Traditional mortgage doesn’t seem like a great fit, since monthly out of pocket would be a bit high. Is interest-only loan the way to go to keep costs low for 2 years and then refinance? I’ve also seen some boutique lenders like PCMA lending that may provide more tailored customized lending terms, but have no experience with them.

Household TC: $1.5M

#realestate #investing #money

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TOP 6 Comments
  • Amazon / Ops
    chaChing💰

    Go to company page Amazon Ops

    chaChing💰
    How do you have household TC of 1.5M?!
    Jun 26, 2021 3
  • eBay / Product
    falc0n

    Go to company page eBay Product

    falc0n
    Traditional mortgage has no appetite for this risk taking. So your best bet is the boutique lenders since they have the appetite for it, or bank loans specially targeted at construction which in most cases are interest only, although most big banks won’t give such a loan unless the loan to value is sub-50% atleast (or you have good finances with solid liquidity).
    Jun 27, 2021 1
    • Lyft
      ML3QX8

      Go to company page Lyft

      ML3QX8
      OP
      Thanks. I’m finding the interest rate is so high on these interest-only loans the monthly payment is significantly higher than with a traditional mortgage. May just have to bite the bullet and go traditional route.
      Jun 28, 2021