I have locked up a NOO vacant SFR for a purchase price of $56k-the owner owes $56k. We have agreed to a "Subject To" purchase whereby I assume the payments while I rehab. I am wrapping up the Sub To deal and the Deed will transfer to my LLC on July 9th, 2015. The mortgage is current.

The ARV is $120k and I will need about $30k to complete all of the renovations and to cover holding costs. The current value as it sits is approximately $84K. When I made the OTP I was anticipating a personal loan from a family member in the amount of $28K but this persons financial situation has since changed and they were only able to loan me $10k interest free, which I have in my LLC bank account as I write this.

So, in reality I only need another $18-$20k to complete the rehab and list the property. The issue here is two-fold; Not many lenders want to loan such a small amount and my credit score is ugly. Unfortunately, I went through a tough divorce and loss of employment (was a university professor for 8 years) so my credit really tanked. My FICO is a measly 531 so I'll probably need a loan based on the deal, not my credit. I am self-employed currently but have been working hard to start this investing biz so I only show roughly 30k in income.

I am about to place another NOO vacant SFR under contract for $79K with an ARV of $124k and this one needs about $14k for repairs and holding costs. The mortgage is current. I am planning on doing this one Sub-To as well so all I would need is the money for rehab and holding costs.

Would this situation be favorable to a Blanket Loan? (if my understanding of a blanket loan is correct). If possible, I would like to get a loan for both of these rehabs at once, if possible, making my total funding needs $34K. ($44K minus the $10k I have already.) If not I plan on taking the proceeds from the 1st rehab and rolling it into the second.

I and the owners are very aware of the possibility that the loan could be called due and there is a signed DOS Disclosure addendum in the OTP contract to that effect.

Any advice on funding options I might have? Thanks in advance.

J. Scott Lee

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