How to refinance out of a hard money loan to conventional
i want to take a hard money loan to purchase a multi family property but the only thing i am concered about it refinancing out of that loan into a covnetional loan because it will be under and LLC and I also do not have anything to show the bank as far as pay stubs ...
[{"id": "gii7spn", "text": "It will be under what?\n\nAnd you show a Pfs not a pay stub", "replies": [{"id": "gii8jcw", "text": "the thing is I make all of my money off the books about 1500 a week. and the hard money loan would be under and LLC", "replies": [{"id": "gii8p38", "text": "Yea a bank isn\u2019t gonna give you money unless you have legal assets and a legal income steam separate from the property", "replies": [], "depth": 3}, {"id": "giibgus", "text": "non-qm bankstatement deal", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "gii9dot", "text": "I could be totally wrong, but from your question you do not come out as someone who is ready for this.", "replies": [{"id": "gii9u7j", "text": "i am self employed and am about 100k liquid with another 100k in publically traded stocks. Just because i do not have a W-2 income means nothing.", "replies": [{"id": "giiacas", "text": "It probably means you\u2019re stuck with hard money", "replies": [], "depth": 3}, {"id": "giianlr", "text": "Sorry didn\u2019t mean to offend you, you did not add much detail. I am here just laying out the facts. Now that is see some more information I would strongly advise start by paying tax on your income before you get into trouble. Do it for few year and come back around, this sub is full of helpful people you will get the right advise when you are ready.", "replies": [], "depth": 3}, {"id": "giiba81", "text": "I got you fam.  Where to start.  Let's see.  Who owns the llc?  If you are the owner of the LLC (25% or more) then you can do it as a refi in your own name.  If you don't have paystubs, the final lender is goign to require income docs for SE.  Usually 2 years tax returns AGI as income.  \n\nYou can purchase with the hard money, do what you gotta do, and then flip it to conventional.  The conv loan is going to be based on on purchase price or appraised value, whichever is less, if less than a year on title.  Over a year will be based on appraised.  You might be able to negotiate on using the improved value with a non-qm which would be close to conventional if the deal has a lot of equity.", "replies": [], "depth": 3}, {"id": "giiyiil", "text": "No one here is going to be able to answer your questions just be based on the information you gave in your post. I help people refi out to tradition debt from hard money all the time (it\u2019s my job) it just depends on the other variables you haven\u2019t mentioned in the post (what\u2019s the leverage of your current debt/LTV, terms of your current mortgage, property NOI, property location, etc.)", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "giibqbf", "text": "I'm a loan officer. I work in both commercial and residential real estate. I do both hard money and conventional lending. \n\nYou can get a hard money loan if you have enough money to put down and/or the property has a significant amount of equity. \n\nYou can refinance into a traditional loan with not much issue as long as the property has been cash flowing well (as long as it's classified as commercial property w/ 5+ units)\n\nDM me, I can help you", "replies": [{"id": "giick71", "text": "my only concern is that the bank will not approve me for a conventional loan due to the fact that i have no income to show them ...what other options do I have even if the property is cash flowing and i have reserves in the bank", "replies": [{"id": "giii53o", "text": "Commercial lenders care less about your personal income, and more about whether the property is cash flow positive. \n\nHow's your net worth in comparison to the value of the property? \n\nWhile it may be difficult to obtain a loan from a big bank, smaller commercial lenders will lend on a property with sufficient equity and is cash flowing positive despite limitations with the client's personal finances.", "replies": [], "depth": 3}, {"id": "gij8ydh", "text": "I work for a bank. We calculate income based off your tax returns. No income on tax returns means no guarantor support or ability to repay.\n\nEdit. &amp; yes you should be concerned. Your only option is to leave a paper trail. Go meet with a CPA.", "replies": [{"id": "gijxlee", "text": "If it\u2019s genuinely a commercial property would not the property\u2019s cash flow be more important?  Understandably for a 5 unit property personal income may be important but for a 25 or 50 unit building I can\u2019t fathom underwriting would give much of a fuck about personal income.  Having the property support itself becomes far more important.", "replies": [{"id": "gik0p5l", "text": "Property income in #1\nGlobal cash flow is #2 \nNo history of personal income is a big red flag. It will lower global cash flow down since personal expenses and living expenses are applied. The way the bank looks at risk is, if there is high vacancy and shit hits the fan, can the guarantor service the debt?", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}, {"id": "gij92sm", "text": "How are you able to do both hard money and conventional?", "replies": [{"id": "gik10ft", "text": "Owner-Occupied Conventional Residential is regulated by the federal government. Every transaction is recorded to the NMLS. \n\nNon-Owner Occupied Hard Money and Commercial is not regulated by the federal government and the transactions are not recorded to the NMLS. \n\nTherefore I can broker hard money and commercial loans on the side and my company never finds out.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "giinmei", "text": "You should be paying taxes because as an American its our duty. I pay 70k in taxes every february and I take pride in doing it.\n\nThere are dscr rental loans that give 30yr 70% ltv loans with no w2 requirement.", "replies": [{"id": "gijngmw", "text": "Lack of pay stubs doesn\u2019t mean that OP doesn\u2019t pay taxes.", "replies": [{"id": "gijniyj", "text": "He said it's off the books and no income taxes.", "replies": [{"id": "gijoilp", "text": "I see that now...", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "gijgydj", "text": "You'll need a partner with a decent PFS. If your networth on paper is less than the loan size, you'll have issues.", "replies": [], "depth": 1}, {"id": "gikd2qf", "text": "As a lender, I\u2019ve been able to get loans approved under your circumstances (ie, a guarantor, sponsor, principal with no secondary source of repayment) but I can promise you that the terms aren\u2019t exactly attractive. \n\nLTV needs to be crazy low, and I mean crazy cray cray low. At least below 50%. \n\nAll rents must go into a bank controlled account and any expenses/withdrawals from the account require prior approval by the bank. In other words, the bank will force you to save property net income in lieu of not having your own savings.", "replies": [{"id": "gipgh55", "text": "How the hell would someone pass KYC if they haven\u2019t been filing taxes / no stated income but have assets? Huge red flag...", "replies": [{"id": "giprfzg", "text": "BSA requirements for KYC involve verifying the principal owner(s) of an LLC exist (social security card + drivers license or passport), not if they file tax returns. The loan would be non-recourse directly to the LLC.", "replies": [{"id": "giprz60", "text": "Thx", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}]