Hard money lender in Buffalo, NY.

I am a hard money lender in Buffalo, and the building that defines this city for an investor is the Buffalo double: a narrow wood frame house with one flat stacked on top of another, a front porch for each, and a shared basement underneath. Whole streets on the West Side, in Riverside and across the East Side are lined with them, and they are the reason a small landlord can buy a two-unit building here for the price of a used truck in other markets.

Cheap to buy does not mean cheap to fix. A double that has sat through a few Buffalo winters with a failed roof or a dead furnace can need as much money as it cost, and the spread between a tired one and a finished one is what the whole deal lives on. My job is to check that the spread is real before you spend it.

I am a private money lender, so you deal with one person who reads the file and signs the term sheet. This page walks through the neighborhoods where doubles trade, what else changes hands, the city tax auction and how to treat it, and how fix and flip loans in Buffalo, DSCR loans in Buffalo and new construction loans in Buffalo fit a market where the basis is low and the work is the variable.

The double is the default. Upper and lower flats, usually two or three bedrooms each, separate entrances, and either one heating plant shared between the units or two older furnaces in the basement. The rehab line on a neglected one is driven by the envelope and the mechanicals: roof, chimney, gutters, foundation seepage, a boiler or furnace near the end, old wiring, and lead paint on trim and windows. Kitchens and baths matter, but they are rarely what blows the budget.

Singles trade as flips, especially in South Buffalo and the quieter North end streets, where a finished three bedroom with a dry basement sells to an owner occupant. The margin on these is thinner in dollars than people expect, so I want the scope tight and the timeline short.

Larger frame houses converted to three or four units turn up on the West Side and near the old Victorian streets. They carry well as rentals, but the conversion history matters: I want to know that the unit count is the legal one, because a refinance appraiser will value the building as what the certificate of occupancy says it is.

Buffalo also has a real stock of city owned and tax foreclosed property, plus vacant lots on the East Side, so infill construction and auction buys both show up as deal types. Each of those comes with its own paperwork, and the auction in particular is worth understanding before you register to bid.

The City of Buffalo runs its own in rem tax foreclosure, separate from the Erie County sale. Owners get a redemption window to pay what is owed, and the parcels that are not redeemed are offered at a public auction. For an investor it is a real source of doubles and singles at a low basis, but it does not work like buying on the open market.

The terms the city has published put a deposit on the winning bid at the sale itself, payable in certified funds, with the balance due within a matter of weeks. You cannot bring a mortgage to the hammer. The city then conveys by quitclaim deed, which promises nothing about the title beyond what the city holds, and the deed is recorded some weeks after the balance is paid. The city has also reserved the right to refuse a transfer to a bidder with code violations on other Buffalo property, and former owners cannot buy back their own parcel.

That changes how I look at a deal from the auction. Plan to pay the deposit and the balance with your own cash. Once the deed is recorded, the question is whether a title company will insure it, and some will want to review the foreclosure proceeding or wait a period before they do. When they will, I can look at a loan that puts the rehab money in place and recovers part of what you paid, underwritten like any other Buffalo double.

Auction parcels are sold as is, often without an interior viewing, and some are occupied. Budget for that. The city sets the dates and the terms for each sale, and it has changed both over the years, so read the current terms of sale on the city's in rem page before you bid on anything.

Fix and flip loans in Buffalo combine the purchase and the rehab in one facility, with the rehab money paid out in draws once the work is actually done. On a double, the first draws usually follow the roof, the heating and the electrical, because a buyer and an inspector will look at those before they look at the countertops.

Winter is part of the schedule here. Exterior work slows down once the weather turns, and a vacant house without heat in January is a frozen pipe waiting to happen, so I want the plan to say how the building stays heated and dry through the rehab. The after-repair value comes from finished sales on the same few blocks, since a street of kept doubles and a street two over can sit far apart. You get a written term sheet in 24 to 48 hours, and closing takes 5 to 10 days subject to title.

How fix and flip loans work

DSCR loans in Buffalo size the loan on what the building rents for. There are no tax returns or W2s in the file; I want the leases, a rent roll, and a sense that both flats are rented at numbers a local appraiser will recognize.

On a double the two leases are the whole story, so a vacant upper or a lower rented well under market changes the loan. Heat matters too: if the units share one boiler and the owner pays for it, that cost comes out of what the building really earns. These close in 14 to 21 days, and they are the natural exit once a rehabbed double is leased. Pricing is stated deal by deal in the written term sheet.

How DSCR loans work

New construction loans in Buffalo put the land and the vertical build in one facility, starting at $150K. Most of what gets built here is infill: a new single or two-unit house on a vacant lot in a neighborhood where the older houses around it have come down over the years.

The contractor bids are reviewed before closing, and I want a line item budget, a build schedule that respects the season, and a builder who has finished a house in the city before. Lot status matters as much as the plans. A parcel bought from the city may carry conditions on what gets built and when, so I read those along with the zoning. These close in 10 to 14 days once the file is complete.

How construction loans work

A Buffalo BRRRR starts with a bridge loan on a tired double. You buy it, fund the rehab in draws, lease both flats, and then refinance into a DSCR loan with the same lender once the building is stabilized. Keeping both loans in one place means the refinance is underwritten by someone who already watched the work get done.

The low basis is what makes the refinance work, and also what makes it fragile. A rehab that runs long or a flat that stays empty for a season eats a bigger share of the equity on a building this size than it would on an expensive one. I would rather plan the refinance on rents you already have in hand. Terms are set for each deal and written into the term sheet.

How the BRRRR bridge works

Splitting the heat into two furnaces costs more up front, but it puts the heating bill on each tenant instead of the owner, and that shows up directly in the rent the refinance can count.

If the rehab starts in the fall, the roof and any exterior work need to be done before the snow, or the schedule slips by a season and the carry with it.

On a building at this price, a few thousand dollars of surprise is a meaningful slice of the spread. I want a contingency in the budget and a contractor who has opened up a Buffalo double before.