First flip, need renovation financing advice

[Craig Weidhorn]

I just bought my first property well below market value. According to multiple real estate agents, once renovated it will be worth hundreds of thousands over purchase price. That said, I’ll need to invest about $100,000 into the renovation to get it there. I’ve got about $50,000 to put into it after closing costs and down payment. I put 30% down on the mortgage. Any suggestions on financing the renovation?

[Ryan Stuckey]

As a first-time investor/rehabber, with your hopefully very accurate rehab and ARV numbers indicating a sufficiently profitable project, you should potentially qualify for 75-80% financing on purchase (i.e. 20-25% down payment) and 100% financing on the rehab cost (funded to a reserve account and available in periodic post-expenditure draws).

Sounds like you have a pretty profitable project and enough liquidity as described above. As it appears you are under contract but not yet closed, you just need to find a short-term purchase and rehab loan from a reputable hard money lender. They will assess the project details in depth and let you know if it can be funded and how much. You should compare 2-3 options to get a range of terms.

What kind of loan are you planning to get to cover 70% of purchase under your current financing plan? You should get a short-term purchase and rehab loan, then post-rehab sell it or (cash-out) refinance to a long-term rental loan per your preference.