Private Money Nevada
Refinancing with Private Money
Extending Your Timeline
Refinancing a hard money loan with another private loan can give you more time to complete renovations or stabilize tenants. Suppose you took out a twelve-month rehab loan to flip a property, but unexpected structural issues added two months to the project. As the original loan’s maturity date approaches, you may refinance into a new short-term loan, preventing default and giving you breathing room. This “refi” doesn’t require paying off the entire principal out of pocket; instead, the new lender pays off the existing loan and becomes the first lienholder.
Unlocking Equity for New Investments
As property values rise or as you add value through improvements, refinancing can pull out cash to fund additional deals. Private money lenders will typically lend up to a percentage of the appraised or after-repair value. Let’s say you bought a fixer-upper in Reno for $200,000 and invested $50,000 in renovations. The property now appraises at $320,000. A private refinance at 65 percent LTV could provide $208,000—enough to pay off your original loan and net cash for your next project.
Bridging to Conventional Financing
Sometimes properties need a transition period before they qualify for a bank loan. After a major rehab, lenders want to see stabilized rental income for several months, or the property may need to pass certain occupancy or safety inspections. A private money refinance can bridge this gap, often at a lower rate than your original hard money loan. Once the property meets conventional requirements, you can secure a long-term mortgage with a lower interest rate and amortized payments.
Avoiding Common Refinancing Pitfalls
Refinancing isn’t without challenges. Private refinances tend to have similar fees as initial hard money loans, including points and appraisal costs. Make sure your profit margin can absorb these expenses. You’ll need updated financial documentation, including a current appraisal and proof of improvements. If your credit score has deteriorated due to delays or other factors, shop around to find a lender willing to work with your profile. Finally, align your new loan term with realistic project completion dates to avoid the need for yet another refinance.
Preparing for Success
To set yourself up for a smooth refinance, maintain detailed records throughout your project. Keep before-and-after photos, receipts and contractor invoices. Document improvements that add value, such as new systems, roof replacements or energy-efficient upgrades. Clear any liens or disputes, and ensure permits are closed out. Lenders will scrutinize the property’s new value and the quality of work completed, so thorough documentation bolsters your case.
Thinking About a Refi?
If your project timeline is running long or you’re looking to tap into increased equity, Private Money Nevada can help you refinance with a new private loan. We’ll review your current situation and advise on the best strategy—whether extending your timeline or bridging to conventional financing. Reach out today to discuss your options and keep your investment on track.
Contact Private Money Nevada Today:
Phone: (702) 205-7070
Email: info@privatemoneynevada.com
Las Vegas Office: 6230 McLeod Dr. Suite 120, Las Vegas, Nevada 89120
Licensed Nevada Mortgage Lender | NMLS #123456
Find trusted private money lenders offering fast approvals, competitive rates, and quick funding for Nevada investment properties, fix and flip projects, and commercial real estate throughout Las Vegas, Reno, and Henderson.
PRIVATE MONEY NEVADA
helping Nevada real estate investors achieve their investment goals