I have never known a acquisition/rehab loan to be of value in terms of the cost of the money and time frames. Some offer 12 month bridge loans- that is not enough time to rehab and stabilize a deal of more than 30 units in my opinion.
I have been doing rehabs and turnarounds for 10 years and have not once done a bridge or acq/rehab loan, although I have looked at them several times. You have to go through the brain damage of getting a loan twice in this scenario with twice the fees, etc.
Things are a little different now due to lending being tighter but overall I bring in equity for the rehab and get the best 5-7 year deal I can on the original mortgage. If the deal is that good on the other side of the rehab, you can refinance at that point and retire some or all of the equity.
Typically these days if the property needs major rehab you will be hard pressed to find a bank to lend on it at all, especially a national bank. If you have a relationship and track record with a local bank, start there. If they don't do these loans, ask the officer to refer you to a local bank that might. Warm referrals from bankers to bankers can't hurt.
Jan 17, 2011