Lend Me A Few Bucks?
Ok here is a strange one...
We purchase properties with an eye on rehabbing them. We then either flip them or refi them and use them as rentals.We pay CASH for the properties thereby bypassing most of the extranious rigamarole.
Heres the problem. We recently purchased a property at a tax sale for 120k, we paid the IRS 10k for the release of the redemption rights, and the property needs about 30k work.
We are trying to find a lender who will use the property as collateral for a rehab loan for 30k. As there is no mortgage we didn't think it would be a problem.
After talking to several banks, we have been told they "don't do rehab loans, regardless of the equity". If we would like to mortgage the property they will be happy to arrange that. Obviously since we are going to flip the property, we don't want a mortgage with closing costs, etc.
To answer the question, yes we can come up with the 30k to rehab it out of our pockets, but what we would LIKE to do is use that 30k to purchase the next property, thereby moving faster, and having several properties in the pipeline at one time.
Thoughts?
Try this lender:
http://www.brookviewfinancial.com/
They specialize in rehab, that is all they do!
Good Luck,
Clint
Thanks but thats a pretty ugly program. They want 5 points at a 15% interest rate!
As I said before, we have cash, just looking for a way to finance the rehab costs. Thanks.
I live in Cincy and can direct you to a couple local lenders who specialize in just rehab loans and should be able to help you out.
Drop me a private message or email me.
Christian "The Solutions Kid" Beebe
[addsig]
Cheapest money I know is margin at a brokerage firm, such as Schwab, assuming you have some equities...next would be revolving credit card lines-cash advances, assuming good credit...next would be cash-equity line against a primary residence, assuming you have such...after that, hard money lenders ask and get 15%+5 points...I personally carry paper on a few sales currently @ 11%. My local commercial bank lender would probably do another 24 mos. loan secured by a first-lien with <50% LTV. Good luck.
Why not just get a mortgage with no pre payment penalties? You are going to make more than enough money on the deal to cover the closings costs.
If I get a mortgage I am looking at at least 3k in closing costs, points, and interest. If I pay cash, I move slower, but have no fees.
What I am trying to do is find something that will cost me less than 10% for a short term rehab loan. They can have first mortgage as there is not a first since I paid cash for the property. The loan term would be less than 6 months most likely.
Thanks!
Why don't you get an equity line of credit at the prime rate? 30K would be approved in the meter of days (at list here)
With ELC you cannot go wrong, even if you credit isn't god enough for the prime rate.
Keep us posted on what you've done since the situations like that are best .edu material.
Real Life Drama continues ...
EUREO
We have this one done. Got a HELOC on the property from a local bank. No problems. Thanks for the responses all.
If you need help I have several investors that will give you hard money rehab loans at conventional rates. Once you get the loan you can keep recycling the money. the rate is prime plus 1% to 3% it is an interest only loan good for 20 years. There is a one time setup fee. but you can qualify for up to $75,000.00. You will never need to worry about rehab money again. Because as you use the money, then sell the property, you will always have $75,000.00 at your disposal. The setup fee is tax deductable because it is set up as a Business Line Of Credit. Call me I'll give you the info for your ****Must Reach Freshman Investor status before posting URL's***