Real Estate Investor · new york · Member since 2008 · 19 posts · 1 vote
this is my first flip, and i need help figuring out how i am going to finance this deal. i have a hard money loan which they want me to put down 10%.
so here are the figures
arv $140,000
purchase 70,000
repairs 30,000
loan:
91,000 at 65% ltv
- 3,640 4% in points
equals $88,360 net
also 13.88 %interest only
so do i have to put $8,836 down for the 10% or
10% of the actual loaned amount?
also, if i put down the 10% can i get a home equity line of credit
to cover the rest of the rehab exspenses, although i only will own the home for a short time? i wanted to get the house for 65,000 so it would be close to the mao but the owner is 92 and very stubborn
any suggestions to financing this?
Others may know different, but as far as I know you would have to prove you have equity in the home before you can take out a HEL or HELOC. That would mean lying one way or another; either lying and getting the hard money lender to write a letter saying the money was a gift (no way (s)he'll do this), or trying to keep the second lender in the dark about the hard money lender altogether.
Real Estate Investor · Las Vegas, NV · Member since 2008 · 1k+ posts · 447 votes
19y
Perhaps you could find a partner. If you network at a local RE investment club you may be able to find someone to take a portion of the deal with you. Get someone to go in for 20% of the deal and you should have things covered.