Looking for private lenders

[stevegwhite]

I am currently putting together my down payment on my first rental unit with a partner.

Since I have just purchased my family home a few months ago and my partner is rebuilding his credit after a failed family investment attempt, we`re not exactly high on a bank`s list. We do have a great plan for student rentals in a great market where I went to school and a few ideas for unique offerings and expect an excellent cash flow. We`ve done our due diligence and are bordering on over research in this time while we build our savings.

We are considering finding a private lender because the higher mortgage rate will still work well within our expenses. We would like to purchase two condo style townhomes for the first year with 5% down. The remaining savings we`re planning on using for furnishings, appliances and several months of expenses.

Can anyone offer us any advice or suggestions on a private lender or whether this will be a possibility. If anyone has a great lender they use and would like to share the recommendation that would be great. What should we watch out for while we begin approaching these lenders.

We are confident that the cash flow will be well worth seeking private lending because the cash flow is excellent and definitely moves us towards our goals.

Thanks everyone,

Steve White

 

[rforgiel]

Steve,

Are you looking for 95% private financing or are you considering getting a 65%-70% LTV mortgage at the bank and topping up that amount with private funds.
The later option is the more traditional one. Getting financed entirely through private funding is possible but you will need a great business plan to sell to an investor. I have seen that done as well but you may need more then 5% down.

The private lender will also be looking for an exit strategy. Are these long term buy and holds or are you looking to increase the value and sell or re-finance at a traditional institution.

Our office is in Hamilton and we have access to unlimited private financing. Feel free to give me a call at 905 332-9377 to discuss.

 

[housingrental]

Steve - Run away from doing this as fast as you can. Trying to buy two student rental properties with 5% using private money as your first rental properties is setting yourself up for disaster. Wait, save money, and start with one.

 

[Thomas Beyer]

QUOTE (housingrental @ Sep 12 2009, 07:06 AM)
Steve - Run away from doing this as fast as you can. Trying to buy two student rental properties with 5% using private money as your first rental properties is setting yourself up for disaster. Wait, save money, and start with one.


Indeed !



private lenders charge anywhere from 6% to 30% .. and you are in for a desaster if you can't get cheap bank financing soon.



Save, buy the first one with 20% down .. then maybe be more levered !



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