Two questions?

Question

FIRST I am wondering if any one has heard of or worked with a company called HILDAGO FINANCIAL GROUP? They are supposed to be based in Scottsdale, AZ and also have a office in Nevada somewhere. They sound legit on the phone and what I can find on line but I want to make sure I'm not going to lose my ass on this deal. SECOND is it as easy to refinance a rehabbed property as everyone says? My whole deal revolves around the refinancing of the two properties I am about to purchase. Any advice would be appreciated.

Gene Kardos · Answer

If you buy house outright with no financing and rehab it with your own money, is it any easier to get it refinanced that way?

Minna Reid · Answer

I would also add that if all else fails, as long as you can afford to sell quickly after rehab, and still have a profit, that could be your last ditch exit. It's very critcal that you buy at the right price, especially if refinancing might not be a viable option.

Chris Zabaleta · Answer

Rehab702 is correct. I am an equity based lender in South FL.  
It used to be that we would look at the comps in the area and not really worry about how long you have owned the property or what you paid.

Times have changed.

Lenders now want to see what you paid for the property and how long ago you purchased it because in today's market good deals are abundant.

My advice:
If you decide to proceed with the idea of private funding after rehab, you need to document everything you do to the property.

[list]Keep a detailed money log to keep track of where you spent your money. Have it in a format that will be easy for a lender/investor to digest.  Excel spreadsheet is OK.  Include cost, description of work and who performed it.  I have had clients hand me 20 pages of photo copies of Home Depot receipts- not a good start.[/list:u][list]Take before and after pictures. An appraisal dated close to when you purchased it (or started rehab) is a good place to start because it comes from a 3rd party and will have photos.[/list:u][list]Keep the pictures in a digital format so you can easily send them via email. People often send me pictures via fax, it's not ideal because grainy black and white pictures don't say much.[/list:u]

Most private lenders are going to do their own inspection and they will see the difference between pre and post rehab.

Also, if you do decide to go with private money you may be able to secure a rehab loan before you dish out your own cash.

Richard Warren · Answer

Better to be discouraged than to get burned.  You need to be creative.  Perhaps you can line up private financing or bring in a money partner.  I’m not saying that you CAN’T get permanent financing, just that it isn’t as easy as mortgage brokers would like you to think.  That’s why a backup plan is so important.

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Gene Kardos · Answer

That is a bit discouraging. I am trying to buy and hold these properties. I guess I will have to come up with a back up plan. Where there is a will there is a way! Any other suggestions?

Richard Warren · Answer

It USED to be easy to refinance a rehabbed property.  But, as the song says, “used to be don’t count anymore.”  Any kind of cash-out refi is difficult in today’s market.  A mortgage broker may tell you it’s easy, but he wants your business and he’s not the one taking a risk.  Lenders seem to be looking for any reason to deny a loan.  If your income and reserves don’t meet the lender’s standards you will not get the loan.  Before the lending crisis it was easy if you had equity, today equity isn’t enough.  Before proceeding you should have a backup plan, if you proceed with the rehab and can’t refinance what will you do?  If you can’t answer that you are taking a huge risk.

BTW I'm in NV and have never heard of Hidalgo Financial Group.
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