Mortgage With Rehab Money Included
When it comes to purchasing a property that needs rehab and getting that money included in your loan...how is that set up?
e.g. is it all included in one loan and its interest only until rehab is done, is it included in two loans, one is mortgage and the other is the rehab loan, how do you apply for this?
Just looking for some insight on how to fund a project that needs rehab if all you may have is some down payment money?
Thank you,
Erica Gouw
First you can go to a hard money lender. They make loans for acquisition as well as rehab. One loan, they pay out the purchase, then advance money for construction as you go. Higher interest, but they specialize in lending for rehab properties.
Second you can go to a friend or relative who has lots of cash and has it in CDs or mutual funds. How about someone who has a self-directed IRA?? If you know someone who has changed jobs recently, you can ask them if they rolled over their 401k. They can move it to a self directed account and you can borrow money from them and give them maybe 10% or 12%. Great for you and great for them. Stock market is always so risky.
I would definately recommend looking into self-directed IRAs.