How to fund rehab

Question

My partner & I just build our LLC, we have a list of properties to fix & flip. If we don’t want to use our personal money, how can we fund rehab?

Jeff Nash · Answer

I’m not sure what you and your partner’s financial situation and credit history look like, but you can use private credit and hard money loans, borrow from family if that is an option, leverage from your own financial resources, bring in other equity partners and JV to some degree on each project, etc.

Nathan Gesner · Answer

I know it's not a popular opinion, but it generally takes money to pay for things.

You can find a partner that has money to invest. You can borrow the money from a hard money lender.

The other option (and it's really crazy) is to work hard to increase your earnings, cut expenses, and save money that you can use to invest. It's a technique proven throughout history, but people seem to have forgotten about it the last 20 years and think they can build wealth without any personal sacrifice.

Chris Seveney · Answer

@David McCellon banks and private lenders have really tightened their standards. The days of even 90% financing are rare - I would expect to see “real” lenders who won’t scam you wanted 30% down and expect double digit rates.

They will also want a personal guarantee so if you don’t put the cash in and it doesn’t fit well they will go after you anyways.

Carlton B. · Answer

If you own property and have equity you can borrow against the equity some sort of LOC. Also if you have decent credit use it. Open cards with the big box stores and use the 6 months 0 percent interest. If you are are new to this be careful using other peoples money sounds good until something goes wrong. The safest way is to do like @Nathan Gesner suggested and actually make plan to save and take your time.

How to fund rehab

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