Re: $100K Free & Clear Property - Posted by John Behle
Posted by John Behle on June 02, 1999 at 19:04:33:
Institutional financing is usually cheaper than discounted mortgages, which are usually cheaper than hard money loans.
So, at 70% LTV, the buyer should easily be able to get the loan needed. Sometimes this looks like getting a first for 80-85% of the sales price and then a second later. Some lenders will lend based on appraisal on a second, where very few will lend on appraisal on a first. That might mean putting some cash in until you finance it back out.
In this situation, you should also be able to easily create a note and sell it. Check with your local buyers and with Mike Morrongiello at American Note.
Hard money would be the third option due to the cost. A better form of hard money might be to find an investor with equity in a property and borrow that at a higher rate (but less than typical hard money) than he/she borrows it out at. It’s called “Equity Arbitrage”. There are several posts below and in the archives relating to it. In this case, you could also refer to it as a “Collateral Rental”.