Hello MBA community! Today an investor, Hope D., was referred to me by an acquaintance in the Gator lending community. She needs to refinance a small mixed use property located in North Carolina. It has a commercial space on the first floor and a three bedroom apartment on the second floor. The apartment is rented long term to three tenants, one room each. According to Hope, she had been working with three other lenders, all of whom either were very slow or did not communicate well. She is now up against her deadline to secure new financing. She states she feels that only a private money lender can help her at this point given the time constraint. Is this a reasonable assumption? I’m still early in my training so I’m not yet familiar with all the resources available to us. If both parts of the property are rented she may qualify for a new loan, but given the tight timeframe maybe she needs a short bridge loan?

What’s the most creative way you’ve helped an investor solve a debt-service coverage ratio (DSCR) issue?

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Which part of the process slows deals down most?

I had a new investor come to me 2 years after they purchased a property from the Detroit Land Bank. The property is fire damaged, needs a new roof, among a plethora of other things. She found a program where she could possibly obtain a grant to pay for the rehab but she had to get estimates from contractors. One contractor quoted her $185K on a property that will only be worth $120K after rehab. She found out the "grant" would have to be repaid, which by definition is not a grant. She didn't receive the grant anyway. Fast forward, she reaches back out to me. I ask her a few questions to see how I could help. This is when I found out that it was a land bank home with fire damage and that she had already had the property for 2 years. Needless to say this would have been a lopsided deal as the as-is value is much lower than the money needed to rehab it. Thanks to Malcolm, I've seen how that can be overcome. I then ask about her credit score (low 500's) and any liquid assets (none). Retirement (tapped out). Now, I'm at a loss as to how I can help her rehab this property. What can I tell her to start working on besides her credit and liquidity? Should she try to partner with someone who has cash and do some sort of equity split.