Financing Project
I am having a tough time understanding all the ways to finance a rehab project. I am looking for a property to rehab - I have 20k - 50k - should I get a conventional mortgage and put 10% down using the rest for materials and labor? If I project to go over the cash on hand should I borrow from a hard money lender. I am a general contractor so I can keep costs down using my man power and acurately estimate the repairs. My goal is to finish the first project and borrow the equity while the home sells to purchase another home to rebab..... Does this make sense... Are there any other options I should be looking into? I would greatly apreciate if you guys had some info to share on how you have done this or would do this! Thanks in advance!!
I would love to get those numbers from you of the HMLs. Do you know any wholesalers or my best option to find a home that will be profitable to renovate? I found a few REOs on realty track that look promising. Is it possible or realistic to purchase - renovate - and borrow the equity before Dec. 15th? Im in a bit of a bind and that is my limitations...Thaks
Mike, are you sugesting borrow 100% and use my cash for the rehab? I talked with a lender today but he was out of state, he said something to the effect that I would be able to borrow the money but I had to pay for renovation costs and would be reimbursed on draws? How does the 100% financing work, my credit score is around 640..... I definately want to go with the best option that will allow me to move fast on the deal..[ Edited by anglerei on Date 10/03/2006 ]
Angle,
I believe the old saying, "You make your money when you BUY." That is, when you buy the property "right."
I am a Realtor. I can best help you make money on the sell side, after rehab.
We have a lot of competition for rehabs here.
By the time a distressed property hits the MLS MANY people have passed on it. They are not always right, so I find deals from time to time, but either way, you have to have your financial ducks in a row and be ready to move.
Generally, you have to beat the streets to find the deals that will give you the best margins.
[addsig]
You are on the right track and your stategy can be done so long as you are going to occupy the house cause thats the only way youre gonna get a HELOC homeequity line of credit. You cant get them on investment property. If you buy with 100% financing you are talking two loans an 80% and a 20%. Noone will give you a HELOC if you already have a second so youll have to refinance to one loan then get you HELOC. Id suggest you Keep your cash and use a credit card to make the repairs. Use 100% financing and then renovate and sell. Then go on to your next project. You should flip first and hold later.
Hi everybody. For this situation depending on your credit, and the condition of the house you can do a 100% conventional, interest only.
[ Edited by jfmlv1950 on Date 10/25/2006 ]